THE ELECTRICITY ACT, 2003 

________ 

ARRANGEMENT OF SECTIONS 

Last Updated: 26-10-2021 
––––––– 

PART I 
PRELIMINARY 

SECTIONS 

1.   Short title, extent and commencement. 

2.   Definitions. 

PART II 

NATIONAL ELECTRICITY POLICY AND PLAN 

3.   National Electricity Policy and Plan. 

 4.   National policy on stand alone systems for rural areas and non-conventional energy systems. 

5.   National policy on electrification and local distribution in rural areas. 

6.   Joint responsibility of State Government and Central Government in rural electrification. 

PART III 

GENERATION OF ELECTRICITY 

7.   Generating company and requirement for setting up of generating station. 

8.   Hydro-electric generation. 

9.   Captive generation. 

10. Duties of generating companies. 

11. Directions to generating companies. 

12. Authorised persons to transmit, supply, etc., electricity. 

PART IV 

LICENSING 

13. Power to exempt. 

14. Grant of licence. 

15. Procedure for grant of licence. 

16. Conditions of licence. 

17. Licensee not to do certain things. 

18. Amendment of licence. 

1 

 
 
 
 
 
SECTIONS 

19. Revocation of licence. 

20. Sale of utilities of licensees. 

21. Vesting of utility in purchaser. 

22. Provisions where no purchase takes place. 

23. Directions to licensees. 

24. Suspension of distribution licence and sale of utility. 

PART V 

TRANSMISSION OF ELECTRICITY 

Inter-State transmission 

25. Inter-State, regional and inter-regional transmission. 

26. National Load Despatch Centre. 

27. Constitution of Regional Load Despatch Centre. 

28. Functions of Regional Load Despatch Centre. 

29. Compliance of directions. 

Intra-State transmission 

30. Transmission within a State. 

31. Constitution of State Load Despatch Centres. 

32. Functions of State Load Despatch Centres. 

33. Compliance of directions. 

Other provisions relating to transmission 

34. Grid Standards. 

35. Intervening transmission facilities. 

36. Charges for intervening transmission facilities. 

37. Directions by Appropriate Government. 

38. Central Transmission Utility and functions. 

39. State Transmission Utility and functions. 

40. Duties of transmission licensees. 

41. Other business of transmission licensee. 

PART VI 

DISTRIBUTION OF ELECTRICITY 

Provisions with respect to distribution licensees 

42. Duties of distribution licensee and open access. 

43. Duty to supply on request. 

44. Exceptions from duty to supply electricity. 

45. Power to recover charges. 

2 

 
 
 
SECTIONS 

46. Power to recover expenditure. 

47. Power to require security. 

48. Additional terms of supply. 

49. Agreements with respect to supply or purchase of electricity. 

50. The Electricity supply code. 

51. Other businesses of distribution licensees. 

52. Provisions with respect to electricity trader. 

Provisions with respect to electricity traders 

Provisions with respect to supply generally 

53. Provision relating to safety and electricity supply. 

54. Control of transmission and use of electricity. 

55. Use, etc., of meters. 

56. Disconnection of supply in default of payment. 

Consumer protection: Standards of performance 

57. Standards of performance of licensee. 

58. Different standards of performance by licensee. 

59. Information with respect to levels of performance. 

60. Market domination. 

PART VII 

TARIFF 

61. Tariff regulations. 

62. Determination of tariff. 

63. Determination of tariff by bidding process. 

64. Procedure for tariff order. 

65. Provision of subsidy by State Government. 

66. Development of market. 

PART VIII 

WORKS 

Works of licensees 

67. Provision as to opening up of streets, railways, etc. 

Provisions relating to overhead lines 

68. Overhead lines. 

69. Notice to telegraph authority. 

3 

 
 
 
PART IX 

CENTRAL ELECTRICITY AUTHORITY 

Constitution and functions of Authority 

SECTIONS 

70. Constitution, etc., of Central Electricity Authority. 
71. Members not to have certain interest. 
72. Officers and staff of Authority. 
73. Functions and duties of Authority. 

74. Power to require statistics and returns. 

75. Directions by Central Government to Authority. 

Certain powers and directions 

PART X 

REGULATORY COMMISSIONS 

Constitution, powers and functions of Central Commission 

76. Constitution of Central Commission. 
77. Qualifications for appointment of Members of Central Commission. 
78. Constitution of Selection Committee to recommend Members. 
79. Functions of Central Commission. 
80. Central Advisory Committee. 
81. Objects of Central Advisory Committee. 

Constitution, powers and functions of State Commissions 

82. Constitution of State Commission. 
83. Joint Commission. 
84. Qualifications for appointment of Chairperson and Members of State Commission. 
85. Constitution of Selection Committee to select Members of State Commission. 
86. Functions of State Commission. 
87. State Advisory Committee. 
88. Objects of State Advisory Committee. 

Appropriate Commission–Other provisions 

89. Term of office and conditions of service of Members. 
90. Removal of Member. 

Proceedings and powers of Appropriate Commission 

91. Secretary, officers and other employees of Appropriate Commission. 
92. Proceedings of Appropriate Commission. 
93. Vacancies, etc., not to invalidate proceedings. 
94. Powers of Appropriate Commission. 
95. Proceedings before Commission. 
96. Powers of entry and seizure. 

4 

 
 
SECTIONS 

97. Delegation. 

Grants, Fund, Accounts, Audit and Report 

98. Grants and loans by Central Government. 

99. Establishment of Fund by Central Government. 

100. Accounts and audit of Central Commission. 

101. Annual report of Central Commission. 

102. Grants and Loans by State Government. 

103. Establishment of Fund by State Government. 

104. Accounts and audit of State Commission. 

105. Annual report of State Commission. 

106. Budget of Appropriate Commission. 

107. Directions by Central Government. 

108. Directions by State Government. 

109. Directions to Joint Commission. 

PART XI 

APPELLATE TRIBUNAL FOR ELECTRICITY 

110. Establishment of Appellate Tribunal. 

111. Appeal to Appellate Tribunal. 

112. Composition of Appellate Tribunal. 

113. Qualifications for appointment of Chairperson and Member of Appellate Tribunal. 

114. Term of office. 

115. Terms and conditions of service. 

116. Vacancies. 

117. Resignation and removal. 

117A. Qualifications, terms and conditions of service of Chairperson and Member. 

118. Member to act as Chairperson in certain circumstances. 

119. Officers and other employees of Appellate Tribunal. 

120. Procedure and powers of Appellate Tribunal. 

121. Power of Appellate Tribunal. 

122. Distribution of business amongst Benches and transfer of cases from one Bench to another 

Bench. 

123. Decision to be by majority. 

124. Right of appellant to take assistance of legal practitioner and of Appropriate Commission to 

appoint presenting officers. 

125. Appeal to Supreme Court. 

5 

 
 
PART XII 

INVESTIGATION AND ENFORCEMENT 

SECTIONS 

126. Assessment. 

127. Appeal to Appellate Authority. 

128. Investigation of certain matters. 

129. Orders for securing compliance. 

130. Procedure for issuing directions by Appropriate Commission. 

PART XIII 

REORGANISATION OF BOARD 

131. Vesting of property of Board in State Government. 

132. Use of proceeds of sale or transfer of Board, etc. 

133. Provisions relating to officers and employees. 

134. Payment of compensation or damages on transfer. 

PART XIV 

OFFENCES AND PENALTIES 

135. Theft of Electricity. 

136. Theft of electric lines and materials. 

137. Punishment for receiving stolen property. 

138. Interference with meters or works of licensee. 

139. Negligently breaking or damaging works. 

140. Penalty for intentionally injuring works. 

141. Extinguishing public lamps. 

142. Punishment for non-compliance of directions by Appropriate Commission. 

143. Power to adjudicate. 

144. Factors to be taken into account by adjudicating officer. 

145. Civil court not to have jurisdiction. 

146. Punishment for non-compliance of orders or directions. 

147. Penalties not to affect other liabilities. 

148. Penalty where works belong to Government. 

149. Offences by companies. 

150. Abetment. 

6 

 
 
 
 
 
SECTIONS 

151. Cognizance of offences. 

151A. Power of police to investigate. 

151B. Certain offences to be cognizable and non-bailable. 

152. Compounding of offences. 

PART XV 

SPECIAL COURTS 

153. Constitution of Special Courts. 

154. Procedure and power of Special Court. 

155. Special Court to have powers of Court of Session. 

156. Appeal and revision. 

157. Review. 

158. Arbitration. 

PART XVI 

DISPUTE RESOLUTION 

Arbitration 

PART XVII 

OTHER PROVISIONS 

Protective clauses 

159. Protection of railways, highways, airports and canals, docks, wharfs and piers. 

160. Protection of telegraphic, telephonic and electric signalling lines. 

161. Notice of accidents and inquiries. 

162. Appointment of Chief Electrical Inspector and Electrical Inspector. 

163. Power for licensee to enter premises and to remove fittings or other apparatus of licensee. 

164. Exercise of powers of Telegraph Authority in certain cases. 

165. Amendment of sections 40 and 41 of Act 1 of 1894. 

PART XVIII 

MISCELLANEOUS 

166. Coordination Forum. 

167. Exemption of electric lines or electrical plants from attachment in certain cases. 

168. Protection of action taken in good faith. 

169. Members, officers, etc., of Appellate Tribunal, Appropriate Commission to be public servants. 

7 

 
 
 
 
 
SECTIONS 

170. Recovery of penalty payable under this Act. 

171. Services of notices, orders or documents. 

172. Transitional provisions. 

173. Inconsistency in laws. 

174. Act to have overriding effect. 

175. Provisions of this Act to be in addition to and not in derogation of other laws. 

176. Power of Central Government to make rules. 

177. Powers of Authority to make regulations. 

178. Powers of Central Commission to make regulations. 

179. Rules and regulations to be laid before Parliament. 

180. Powers of State Governments to make rules. 

181. Powers of State Commissions to make regulations. 

182. Rules and regulations to be laid before State Legislature. 

183. Power to remove difficulties. 

184. Provisions of Act not to apply in certain cases. 

185. Repeal and saving. 

THE SCHEDULE. 

8 

 
 
 
THE ELECTRICITY ACT, 2003 
ACT NO. 36 OF 2003 

[26th May, 2003.] 
An Act to consolidate the laws relating to generation, transmission, distribution, trading and use 
of  electricity  and  generally  for  taking  measures  conducive  to  development  of  electricity 
industry,  promoting  competition  therein,  protecting  interest  of  consumers  and  supply  of 
electricity  to  all  areas,  rationalisation  of  electricity  tariff,  ensuring  transparent  policies 
regarding subsidies, promotion of efficient and environmentally benign policies, constitution 
of  Central  Electricity  Authority,  Regulatory  Commissions  and  establishment  of  Appellate 
Tribunal and for matters connected therewith or incidental thereto. 
BE it enacted by Parliament in the Fifty-fourth Year of the Republic of India as follows:– 

PART I 

PRELIMINARY 

1. Short title, extent and commencement.–(1) This Act may be called the Electricity Act, 2003. 
(2) It extends to the whole of India 1***. 
(3) It shall come into force on such date2 as the Central Government may, by notification, appoint: 
Provided that different dates may be appointed for different provisions of this Act and any reference 
in any such provision to the commencement of this Act shall be construed as a reference to the coming 
into force of that provision. 

2. Definitions.–In this Act, unless the context otherwise requires,– 

(1)  “Appellate  Tribunal”  means  the  Appellate  Tribunal  for  Electricity  established  under  section 

110; 

(2) “appointed date” means such date as the Central Government may, by notification, appoint; 

(3) “area of supply” means the area within which a distribution licensee is authorised by his licence 

to supply electricity; 

(4)  “Appropriate  Commission”  means  the  Central  Regulatory  Commission  referred  to  in                

sub-section (1) of section 76 or the State Regulatory Commission referred to in section 82 or the Joint 
Commission referred to in section 83, as the case may be; 

(5) “Appropriate Government” means,– 

(a) the Central Government,– 

(i) in respect of a generating company wholly or partly owned by it; 

(ii) in relation to any inter-State generation, transmission, trading or supply of electricity and 
with  respect  to  any  mines,  oil-fields,  railways,  national  highways,  airports,  telegraphs, 
broadcasting stations and any works of defence, dockyard, nuclear power installations; 

(iii) in respect of the National Load Despatch Centre and Regional Load Despatch Centre; 

(iv) in relation to any works or electric installation belonging to it or under its control; 

(b) in any other case, the State Government, having jurisdiction under this Act; 

(6) “Authority” means the Central Electricity Authority referred to in sub-section (1) of section 70; 

1. The words “except the State of Jammu and Kashmir” omitted by Act 34 of 2019, s. 95 and the Fifth Schedule 
    (w.e.f. 31-10- 2019). 
2. 10th June, 2003 (Ss. 1 to 120 and  ss. 122 to 185),  vide notification No. S.O. 669(E), dated 10th June, 2003,  see Gazette of 

India, Extraordinary, Part II, sec. 3(ii). 

9 

 
 
 
                                                           
(7)  “Board”  means  a  State  Electricity  Board,  constituted  before  the  commencement  of  this              

Act, under sub-section (1) of section 5 of the Electricity (Supply) Act, 1948 (54 of 1948); 

 (8)  “Captive  generating  plant”  means  a  power  plant  set  up  by  any  person  to  generate  electricity 
primarily for his own use and includes a power plant set up by any co-operative society or association 
of  persons  for  generating  electricity  primarily  for  use  of  members  of  such  co-operative  society  or 
association; 

(9)  “Central  Commission”  means  the  Central  Electricity  Regulatory  Commission  referred  to  in      

sub-section (1) of section 76; 

(10)  “Central  Transmission  Utility”  means  any  Government  company  which  the  Central 

Government may notify under sub-section (1) of section 38; 

(11)  “Chairperson”  means  the  Chairperson  of  the  Authority  or  Appropriate  Commission  or  the 

Appellate Tribunal, as the case may be; 

(12) “Cogeneration” means a process which simultaneously produces two or more forms of useful 

energy (including electricity); 

(13)  “company”  means  a  company  formed  and  registered  under  the  Companies  Act,  1956  (1  of 

1956) and includes any body corporate under a Central, State or Provincial Act; 

(14) “conservation” means any reduction in consumption of electricity as a result of increase in the 

efficiency in supply and use of electricity; 

(15) “consumer” means any person who is supplied with electricity for his own use by a licensee or 
the Government or by any other person engaged in the business of supplying electricity to the public 
under this Act or any other law for the time being in force and includes any person whose premises are 
for the time being connected for the purpose of receiving electricity with the works of a licensee, the 
Government or such other person, as the case may be; 

(16) “dedicated transmission lines” means any electric supply-line for point to point transmission 
which are required for the purpose of connecting electric lines or electric plants of a captive generating 
plant referred to in section 9 or generating station referred to in section 10 to any transmission lines or 
sub-stations, or generating stations, or the load centre, as the case may be; 

 (17)  “distribution  licensee”  means  a  licensee  authorised  to  operate  and  maintain  a  distribution 

system for supplying electricity to the consumers in his area of supply; 

(18) “distributing main” means the portion of any main with which a service line is, or is intended 

to be, immediately connected; 

(19) “distribution system” means the system of wires and associated facilities between the delivery 
points on the transmission lines or the generating station connection and the point of connection to the 
installation of the consumers; 

(20)  “electric  line”  means  any  line  which  is  used  for  carrying  electricity  for  any  purpose  and 

includes– 

(a) any support for any such line, that is to say, any structure, tower, pole or other thing in, on, 

by or from which any such line is, or may be, supported, carried or suspended; and 

(b) any apparatus connected to any such line for the purpose of carrying electricity; 

(21) “Electrical Inspector” means a person appointed as such by the Appropriate Government under 

sub-section (1) of section 162 and also includes Chief Electrical Inspector; 

10 

 
(22) “electrical plant” means any plant, equipment, apparatus or appliance or any part thereof used 
for, or connected with, the generation, transmission, distribution or supply of electricity but does not 
include– 

(a) an electric line; or 

(b) a meter used for ascertaining the quantity of electricity supplied to any premises; or 

(c) an electrical equipment, apparatus or appliance under the control of a consumer; 

(23) “electricity” means electrical energy– 

(a) generated, transmitted, supplied or traded for any purpose; or 

(b) used for any purpose except the transmission of a message; 

(24) “Electricity Supply Code” means the Electricity Supply Code specified under section 50; 

(25) “electricity system” means a system under the control of a generating company or licensee, as 

the case may be, having one or more– 

(a) generating stations; or 

(b) transmission lines; or 

(c) electric lines and sub-stations, 

and when used in the context of a State or the Union, the entire electricity system within the territories   
thereof; 

(26)  “electricity  trader”  means  a  person  who  has  been  granted  a  licence  to  undertake  trading  in 

electricity under section 12; 

(27) “franchisee” means a person authorised by a distribution licensee to distribute electricity on its 

behalf in a particular area within his area of supply; 

(28)  “generating  company”  means  any  company  or  body  corporate  or  association  or  body  of 
individuals,  whether  incorporated  or  not,  or  artificial  juridical  person,  which  owns  or  operates  or 
maintains a generating station; 

(29)  “generate”  means  to  produce  electricity  from  a  generating  station  for  the  purpose  of  giving 

supply to any premises or enabling a supply to be so given; 

(30)  “generating  station”  or  “station”  means  any  station  for  generating  electricity,  including  any 
building  and  plant  with  step-up  transformer,  switch-gear,  switch  yard,  cables  or  other  appurtenant 
equipment, if any, used for that purpose and the site thereof; a site intended to be used for a generating 
station,  and  any  building  used  for  housing  the  operating  staff  of  a  generating  station,  and  where 
electricity is generated by water-power, includes penstocks, head and tail works, main and regulating 
reservoirs, dams and other hydraulic works, but does not in any case include any sub-station; 

(31) “Government company” shall have the meaning assigned to it in section 617 of the Companies 

Act, 1956 (1 of 1956); 

(32)  “grid”  means  the  high  voltage  backbone  system  of  inter-connected  transmission  lines,            

sub-station and generating plants; 

(33) “Grid Code” means the Grid Code specified by the Central Commission under clause (h) of   

sub-section (1) of section 79; 

(34)  “Grid  Standards”  means  the  Grid  Standards  specified  under  clause  (d)  of  section  73  by  the 

Authority; 

11 

 
(35) “high voltage line” means an electric line or cable of a nominal voltage as may be specified by 

the Authority from time to time; 

(36) “inter-State transmission system” includes– 

(i)  any  system  for  the  conveyance  of  electricity  by  means  of  main  transmission  line  from  the 

territory of one State to another State; 

(ii)  the  conveyance  of  electricity  across  the  territory  of  an  intervening  State  as  well  as 

conveyance within the State which is incidental to such inter-State transmission of electricity; 

(iii)  the  transmission  of  electricity  within  the  territory  of  a  State  on  a  system  built,  owned, 

operated, maintained or controlled by a Central Transmission Utility; 

(37) “intra-State transmission system” means any system for transmission of electricity other than 

an inter-State transmission system; 

(38) “licence” means a licence granted under section 14; 

(39) “licensee” means a person who has been granted a licence under section 14; 

(40) “line” means any wire, cable, tube, pipe, insulator, conductor or other similar thing (including 
its casing or coating) which is designed or adapted for use in carrying electricity and includes any line 
which surrounds or supports, or is surrounded or supported by or is installed in close proximity to, or 
is supported, carried or suspended in association with, any such line; 

(41)  “local  authority”  means  any  Nagar  Panchayat,  Municipal  Council,  municipal  corporation, 
Panchayat  constituted  at  the  village,  intermediate  and  district  levels,  body  of  port  commissioners  or 
other authority legally entitled to, or entrusted by the Union or any State Government with, the control 
or management of any area or local fund; 

 (42)  “main”  means  any  electric  supply-line  through  which  electricity  is,  or  is  intended  to  be, 

supplied; 

(43)  “Member”  means  the  Member  of  the  Appropriate  Commission  or  Authority  or  Joint 
Commission,  or  the  Appellate  Tribunal,  as  the  case  may  be,  and  includes  the  Chairperson  of  such 
Commission or Authority or Appellate Tribunal; 

(44) “National Electricity Plan” means the National Electricity Plan notified under sub-section (4) 

of section 3; 

(45)  “National  Load  Despatch  Centre”  means  the  Centre  established  under  sub-section  (1)  of  

section 26; 

(46) “notification” means notification published in the Official Gazette and the expression “notify” 

shall be construed accordingly; 

(47)  “open  access”  means  the  non-discriminatory  provision  for  the  use  of  transmission  lines  or 
distribution system or associated facilities with such lines or system by any licensee or consumer or a 
person  engaged  in  generation  in  accordance  with  the  regulations  specified  by  the  Appropriate 
Commission; 

(48) “overhead line” means an electric line which is placed above the ground and in the open air 

but does not include live rails of a traction system; 

(49) “person” shall include any company or body corporate or association or body of individuals, 

whether incorporated or not, or artificial juridical person; 

12 

 
 
(50)  “power  system”  means  all  aspects  of  generation,  transmission,  distribution  and  supply  of 

electricity and includes one or more of the following, namely:– 

(a) generating stations; 

(b) transmission or main transmission lines; 

(c) sub-stations; 

(d) tie-lines; 

(e) load despatch activities; 

(f) mains or distribution mains; 

(g) electric supply-lines; 

(h) overhead lines; 

(i) service lines; 

(j) works; 

(51) “premises” includes any land, building or structure; 

(52) “prescribed” means prescribed by rules made by the Appropriate Government under this Act; 

(53) “public lamp” means an electric lamp used for the lighting of any street; 

(54) “real time operation” means action to be taken at a given time at which information about the 

electricity system is made available to the concerned Load Despatch Centre; 

(55)  “Regional  Power  Committee”  means  a  committee  established  by  resolution  by  the  Central 
Government for a specified region for facilitating the integrated operation of the power systems in that 
region; 

(56)  “Regional  Load  Despatch  Centre”  means  the  Centre  established  under  sub-section  (1)  of  

section 27; 

(57) “regulations” means regulations made under this Act; 

(58) “repealed laws” means the Indian Electricity Act, 1910 (9 of 1910), the Electricity (Supply) 
Act, 1948 (54 of 1948) and the Electricity Regulatory Commissions Act, 1998 (14 of 1998) repealed 
by section 185; 

(59) “rules” means rules made under this Act; 

(60) “Schedule” means the Schedule to this Act; 

(61) “service-line” means any electric supply-line through which electricity is, or is intended to be, 

supplied– 

(a) to a single consumer either from a distributing main or immediately from the Distribution 

Licensee’s premises; or 

(b)  from  a  distributing  main  to  a  group  of  consumers  on  the  same  premises  or  on  contiguous 

premises supplied from the same point of the distributing main; 

(62)  “specified”  means  specified  by  regulations  made  by  the  Appropriate  Commission  or  the 

Authority, as the case may be, under this Act; 

(63)  “stand  alone  system”  means  the  electricity  system  set-up  to  generate  power  and  distribute 

electricity in a specified area without connection to the grid; 

(64)  “State  Commission”  means  the  State  Electricity  Regulatory  Commission  constituted  under  
sub-section  (1)  of  section  82  and  includes  a  Joint  Commission  constituted  under  sub-section  (1)  of  
section 83; 

13 

 
(65) “State Grid Code” means the State Grid Code specified under clause (h) of sub-section (1) of 

section 86; 

(66) “State  Load  Despatch  Centre”  means the  centre established  under sub-section  (1)  of  section 

31; 

(67) “State Transmission Utility” means the Board or the Government company specified as such 

by the State Government under sub-section (1) of section 39; 

(68) “street” includes any way, road, lane, square, court, alley, passage or open space, whether a 
thoroughfare or not, over which the public have a right of way, and also the roadway and footway over 
any public bridge or causeway; 

(69) “sub-station” means a station for transforming or converting electricity for the transmission or 
distribution  thereof  and  includes  transformers,  converters,  switch-gears,  capacitors,  synchronous 
condensers, structures, cable and other appurtenant equipment and any buildings used for that purpose 
and the site thereof; 

(70) “supply”, in relation to electricity, means the sale of electricity to a licensee or consumer; 

(71) “trading” means purchase of electricity for resale thereof and the expression “trade” shall be 

construed accordingly; 

(72) “transmission lines" means all high pressure cables and overhead lines (not being an essential 
part  of  the  distribution  system  of  a  licensee)  transmitting  electricity  from  a  generating  station  to 
another  generating  station  or  a  sub-station,  together  with  any  step-up  and  step-down  transformers, 
switch-gear  and  other  works  necessary to  and  used  for the control  of such  cables  or  overhead  lines, 
and such buildings or part thereof as may be required to accommodate such transformers, switch-gear 
and other works; 

(73) “transmission licensee” means a licensee authorised to establish or operate transmission lines; 

(74) “transmit” means conveyance of electricity by means of transmission lines and the expression 

“transmission” shall be construed accordingly; 

(75)  “utility”  means  the  electric  lines  or  electrical  plant,  and  includes  all  lands,  buildings,  works 
and  materials  attached  thereto  belonging  to  any  person  acting  as  a  generating  company  or  licensee 
under the provisions of this Act; 

(76) “wheeling” means the operation whereby the distribution system and associated facilities of a 
transmission licensee or distribution licensee, as the case may be, are used by another person for the 
conveyance of electricity on payment of charges to be determined under section 62; 

(77)  “works”  includes  electric  line,  and  any  building,  plant,  machinery,  apparatus  and  any  other 
thing of whatever description required to transmit, distribute or supply electricity to the public and to 
carry into effect the objects of a licence or sanction granted under this Act or any other law for the 
time being in force. 

PART II 

NATIONAL ELECTRICITY POLICY AND PLAN 

3.  National  Electricity  Policy  and  Plan.–(1)  The  Central  Government  shall,  from  time  to  time, 
prepare the National Electricity Policy and tariff policy, in consultation with the State Governments and 
the Authority for development of the power system based on optimal utilisation of resources such as coal, 
natural gas, nuclear substances or materials, hydro and renewable sources of energy. 

(2) The Central Government shall publish National Electricity Policy and tariff policy from time to 

time. 

14 

 
(3) The Central Government may, from time to time, in consultation with the State Governments and 

the  Authority,  review  or  revise  the  National  Electricity  Policy  and  tariff  policy  referred  to  in                     
sub-section (1). 

(4) The Authority shall prepare a National Electricity Plan in accordance with the National Electricity 

Policy and notify such plan once in five years: 

Provided  that  the  Authority  while  preparing  the  National  Electricity  Plan  shall  publish  the  draft 
National  Electricity  Plan  and  invite  suggestions  and  objections  thereon  from  licensees,  generating 
companies and the public within such time as may be prescribed: 

Provided further that the Authority shall– 

(a) notify the plan after obtaining the approval of the Central Government; 

(b) revise the plan incorporating therein the directions, if any, given by the Central Government 

while granting approval under clause (a). 

(5) The Authority may review or revise the National Electricity Plan in accordance with the National 

Electricity Policy. 

4. National policy on stand alone systems for rural areas and non-conventional energy systems.– 
The  Central  Government  shall,  after  consultation  with  the  State  Governments,  prepare  and  notify  a 
national  policy,  permitting  stand  alone  systems  (including  those  based  on  renewable  sources  of  energy 
and other non-conventional sources of energy) for rural areas. 

5.  National  policy  on  electrification  and  local  distribution  in  rural  areas.–The  Central 
Government  shall  also formulate  a  national  policy,  in  consultation  with the  State  Governments  and  the 
State  Commissions,  for  rural  electrification  and  for  bulk  purchase  of  power  and  management  of  local 
distribution  in  rural  areas  through  Panchayat  Institutions,  users’  associations,  co-operative  societies,    
non-Governmental organisations or franchisees. 

1[6. Joint responsibility of State Government and Central Government in rural electrification.–
The concerned State Government and the Central Government shall jointly endeavour to provide access 
to  electricity  to  all  areas  including  villages  and  hamlets  through  rural  electricity  infrastructure  and 
electrification of households.] 

PART III 

GENERATION OF ELECTRICITY 

7.  Generating  company  and  requirement  for  setting  up  of  generating  station.–Any  generating 
company may establish, operate and maintain a generating station without obtaining a licence under this 
Act  if  it  complies  with  the  technical  standards  relating  to  connectivity  with  the  grid  referred  to  in      
clause (b) of section 73. 

8. Hydro-electric generation.–(1) Notwithstanding anything contained in section 7, any generating 
company intending to set up a hydro-generating station shall prepare and submit to the Authority for its 
concurrence, a scheme estimated to involve a capital expenditure exceeding such sum, as may be fixed by 
the Central Government, from time to time, by notification. 

(2) The Authority shall, before concurring in any scheme submitted to it under sub-section (1) have 

particular regard to, whether or not in its opinion,– 

(a) the proposed river-works will prejudice the prospects for the best ultimate development of the 
river  or  its  tributaries  for  power  generation,  consistent  with  the  requirements  of  drinking  water, 

1. Subs. by Act 26 of 2007, s. 2, for section 6 (w.e.f. 15-6-2007). 

15 

 
                                                           
irrigation, navigation, flood-control, or other public purposes, and for this purpose the Authority shall 
satisfy  itself,  after  consultation  with  the  State  Government,  the  Central  Government,  or  such  other 
agencies as it may deem appropriate, that an adequate study has been made of the optimum location 
of dams and other river-works; 

(b) the proposed scheme meets the norms regarding dam design and safety. 

(3) Where a multi-purpose scheme for the development of any river in any region is in operation, the 
State Government and the generating company shall co-ordinate their activities with the activities of the 
persons responsible for such scheme in so far as they are inter-related. 

9. Captive generation.–(1) Notwithstanding anything contained in this Act, a person may construct, 

maintain or operate a captive generating plant and dedicated transmission lines: 

Provided  that  the  supply  of  electricity  from  the  captive  generating  plant  through  the  grid  shall  be 

regulated in the same manner as the generating station of a generating company: 

1[Provided further that no licence shall be required under this Act for supply of electricity generated 
from a captive generating plant to any licensee in accordance with the provisions of this Act and the rules 
and  regulations  made  thereunder  and  to  any  consumer  subject  to  the  regulations  made  under                
sub-section (2) of section 42.] 

(2)  Every  person,  who  has  constructed  a  captive  generating  plant  and  maintains  and  operates  such 
plant,  shall  have  the  right  to  open  access  for  the  purposes  of  carrying  electricity  from  his  captive  
generating plant to the destination of his use: 

Provided that such open access shall be subject to availability of adequate transmission facility and 
such availability of transmission facility shall be determined by the Central Transmission Utility or the 
State Transmission Utility, as the case may be: 

Provided  further  that  any  dispute  regarding  the  availability  of  transmission  facility  shall  be 

adjudicated upon by the Appropriate Commission. 

10.  Duties  of  generating  companies.–(1)  Subject  to  the  provisions  of  this  Act,  the  duties  of  a 
generating company shall be to establish, operate and maintain generating stations, tie-lines, sub-stations 
and dedicated transmission lines connected therewith in accordance with the provisions of this Act or the 
rules or regulations made thereunder. 

(2) A generating company may supply electricity to any licensee in accordance with this Act and the 
rules and regulations made thereunder and may, subject to the regulations made under sub-section (2) of 
section 42, supply electricity to any consumer. 

(3) Every generating company shall– 

(a) submit technical details regarding its generating stations to the Appropriate Commission and 

the Authority;  

(b) co-ordinate with the Central Transmission Utility or the State Transmission Utility, as the case 

may be, for transmission of the electricity generated by it. 

11.  Directions  to  generating  companies.–(1)  The  Appropriate  Government  may  specify  that  a 
generating company shall, in extraordinary circumstances operate and maintain any generating station in 
accordance with the directions of that Government. 

1. Ins. by Act 26 of 2007, s. 3 (w.e.f. 15-6-2007). 

16 

 
                                                           
 
Explanation.–For  the  purposes  of  this  section,  the  expression  “extraordinary  circumstances”  means 
circumstances arising out of threat to security of the State, public order or a natural calamity or such other 
circumstances arising in the public interest. 

(2) The Appropriate Commission may offset the adverse financial impact of the directions referred to 

in sub-section (1) on any generating company in such manner as it considers appropriate. 

12. Authorised persons to transmit, supply, etc., electricity.–No person shall– 

PART IV 

LICENSING 

(a) transmit electricity; or 

(b) distribute electricity; or 

(c) undertake trading in electricity,  

unless he is authorised to do so by a licence issued under section 14, or is exempt under section 13. 

13.  Power  to  exempt.–The  Appropriate  Commission  may,  on  the  recommendations  of  the 
Appropriate  Government, in  accordance  with the  national  policy  formulated  under  section 5  and in the 
public interest, direct, by notification that subject to such conditions and restrictions, if any, and for such 
period or periods, as may be specified in the notification, the provisions of section 12 shall not apply to 
any  local  authority,  Panchayat  Institution,  users’  association,  co-operative  societies,  non-governmental 
organisations, or franchisees. 

14.  Grant  of  licence.–The  Appropriate  Commission  may,  on  an  application  made  to  it  under  

section 15, grant a licence to any person– 

(a) to transmit electricity as a transmission licensee; or 

(b) to distribute electricity as a distribution licensee; or 

(c) to undertake trading in electricity as an electricity trader, 

in any area as may be specified in the licence: 

Provided that any person engaged in the business of transmission or supply of electricity under the 
provisions of the repealed laws or any Act specified in the Schedule on or before the appointed date shall 
be deemed to be a licensee under this Act for such period as may be stipulated in the licence, clearance or 
approval granted to him under the repealed laws or such Act specified in the Schedule, and the provisions 
of  the  repealed  laws  or  such  Act  specified  in  the  Schedule  in  respect  of  such  licence  shall  apply  for  a 
period of one year from the date of commencement of this Act or such earlier period as may be specified, 
at the  request  of the  licensee,  by  the  Appropriate  Commission  and  thereafter the  provisions  of this  Act 
shall apply to such business: 

Provided  further  that  the  Central  Transmission  Utility  or  the  State  Transmission  Utility  shall  be 

deemed to be a transmission licensee under this Act: 

Provided also that in case an Appropriate Government transmits electricity or distributes electricity or 
undertakes trading in electricity, whether before or after the commencement of this Act, such Government 
shall be deemed to be a licensee under this Act, but shall not be required to obtain a licence under this 
Act: 

Provided also that the Damodar Valley Corporation, established under sub-section (1) of section 3 of 
the Damodar Valley Corporation Act, 1948 (14 of 1948), shall be deemed to be a licensee under this Act 
but  shall  not  be  required  to  obtain  a  licence  under  this  Act  and  the  provisions  of  the  Damodar  Valley 

17 

 
Corporation Act, 1948 in so far as they are not inconsistent with the provisions of this Act, shall continue 
to apply to that Corporation: 

Provided also that the Government company or the company referred to in sub-section (2) of section 
131 of this Act and the company or companies created in pursuance of the Acts specified in the Schedule, 
shall be deemed to be a licensee under this Act: 

Provided  also  that  the  Appropriate  Commission  may  grant  a  licence  to  two  or  more  persons  for 
distribution  of  electricity  through  their  own  distribution  system  within  the  same  area,  subject  to  the 
conditions that the applicant for grant of licence within the same area shall, without prejudice to the other 
conditions  or  requirements  under  this  Act,  comply  with  the  additional  requirements  1[relating  to  the 
capital adequacy, creditworthiness, or code of conduct] as may be prescribed by the Central Government, 
and no such applicant, who complies with all the requirements for grant of licence, shall be refused grant 
of licence on the ground that there already exists a licensee in the same area for the same purpose: 

Provided  also  that  in  a  case  where  a  distribution  licensee  proposes  to  undertake  distribution  of 
electricity for a specified area within his area of supply through another person, that person shall not be 
required  to  obtain  any  separate  licence  from  the  concerned  State  Commission  and  such  distribution 
licensee shall be responsible for distribution of electricity in his area of supply: 

Provided also that where a person intends  to generate and distribute electricity in a rural area to be 
notified  by  the  State  Government,  such  person  shall  not  require  any  licence  for  such  generation  and 
distribution of electricity, but he shall comply with the measures which may be specified by the Authority 
under section 53: 

Provided also that a distribution licensee shall not require a licence to undertake trading in electricity. 

15.  Procedure for  grant of  licence.–(1)  Every  application  under  section  14  shall  be  made  in  such 
form and in such manner as may be specified by the Appropriate Commission and shall be accompanied 
by such fee as may be prescribed. 

(2)  Any  person  who  has  made  an  application  for  grant  of  a  licence  shall,  within  seven  days  after 
making such application, publish a notice of his application with such particulars and in such manner as 
may be specified and a licence shall not be granted– 

(i) until the objections, if any, received by the Appropriate Commission in response to publication 

of the application have been considered by it: 

Provided  that  no  objection  shall  be  so  considered  unless  it  is  received  before  the  expiration  of 

thirty days from the date of the publication of the notice as aforesaid; 

(ii) until, in the case of an application for a licence for an area including the whole or any part of 
any  cantonment,  aerodrome,  fortress,  arsenal,  dockyard  or  camp  or  of  any  building  or  place  in  the 
occupation  of  the  Government  for  defence  purposes,  the  Appropriate  Commission  has  ascertained 
that there is no objection to the grant of the licence on the part of the Central Government. 

(3) A person intending to act as a transmission licensee shall, immediately on making the application, 
forward a copy of such application to the Central Transmission Utility or the State Transmission Utility, 
as the case may be. 

(4)  The  Central  Transmission  Utility  or  the  State  Transmission  Utility,  as  the  case  may  be,  shall, 
within thirty days after the receipt of the copy of the application referred to in sub-section (3), send its 
recommendations, if any, to the Appropriate Commission: 

1. Subs. by Act 57 of 2003, s. 2, for “(including the capital adequacy, creditworthiness, or code of conduct)” (w.e.f. 27-1-2004). 

18 

 
                                                           
 
Provided that such recommendations shall not be binding on the Commission. 

(5) Before granting a licence under section 14, the Appropriate Commission shall– 

(a) publish a notice in two such daily newspapers, as that Commission may consider necessary, 

stating the name and address of the person to whom it proposes to issue the licence; 

(b)  consider  all  suggestions  or  objections  and  the  recommendations,  if  any,  of  the  Central 

Transmission Utility or the State Transmission Utility, as the case may be. 

(6) Where a person makes an application under sub-section (1) of section 14 to act as a licensee, 
the  Appropriate  Commission  shall,  as  far  as  practicable,  within  ninety  days  after  receipt  of  such 
application,– 

(a)  issue  a  licence  subject  to  the  provisions  of  this  Act  and  the  rules  and  regulations  made 

thereunder; or 

(b)  reject  the  application  for  reasons  to  be  recorded  in  writing  if  such  application  does  not 
conform  to  the  provisions  of  this  Act  or  the  rules  and  regulations  made  thereunder  or  the 
provisions of any other law for the time being in force: 

Provided that no application shall be rejected unless the applicant has been given an opportunity of 

being heard. 

(7) The  Appropriate  Commission  shall, immediately  after  issue of a  licence, forward  a  copy  of  the 
licence  to  the  Appropriate  Government,  Authority,  local  authority,  and  to  such  other  person  as  the 
Appropriate Commission considers necessary. 

 (8)  A  licence  shall  continue  to  be in  force  for a  period  of twenty-five  years  unless  such licence  is 

revoked. 

16.  Conditions  of  licence.–The  Appropriate  Commission  may  specify  any  general  or  specific 
conditions which shall apply either to a licensee or class of licensees and such conditions shall be deemed 
to be conditions of such licence: 

Provided  that  the  Appropriate  Commission  shall,  within  one  year  from  the  appointed  date,  specify 
any  general  or  specific  conditions  of  licence  applicable  to  the  licensees  referred  to  in  the  first,  second, 
third, fourth and fifth provisos to section 14 after the expiry of one year from the commencement of this 
Act. 

17.  Licensee  not  to  do  certain  things.–(1)  No  licensee  shall,  without  prior  approval  of  the 

Appropriate Commission,– 

(a) undertake any transaction to acquire by purchase or takeover or otherwise, the utility of any 

other licensee; or  

(b) merge his utility with the utility of any other licensee: 

Provided that nothing contained in this sub-section shall apply if the utility of the licensee is situate in 

a State other than the State in which the utility referred to in clause (a) or clause (b) is situate. 

(2) Every licensee shall, before obtaining the approval under sub-section (1), give not less than one 
month’s notice to every other licensee who transmits or distributes, electricity in the area of such licensee 
who applies for such approval. 

(3) No licensee shall at any time assign his licence or transfer his utility, or any part thereof, by sale, 

lease, exchange or otherwise without the prior approval of the Appropriate Commission. 

(4) Any agreement, relating to any transaction specified in sub-section (1) or sub-section (3), unless 

made with the prior approval of the Appropriate Commission, shall be void. 

19 

 
18. Amendment of licence.–(1) Where in its opinion the public interest so permits, the Appropriate 
Commission, may, on the application of the licensee or otherwise, make such alterations and amendments 
in the terms and conditions of his licence as it thinks fit: 

Provided  that  no  such  alterations  or  amendments  shall  be  made  except  with  the  consent  of  the 
licensee  unless  such  consent  has,  in  the  opinion  of  the  Appropriate  Commission,  been  unreasonably 
withheld. 

(2)  Before  any  alterations or  amendments  in the licence  are  made  under  this section,  the  following 

provisions shall have effect, namely:– 

(a) where the licensee has made an application under sub-section (1) proposing any alteration or 
modifications  in  his  licence,  the  licensee  shall  publish  a  notice  of  such  application  with  such 
particulars and in such manner as may be specified; 

(b)  in  the  case  of  an  application  proposing  alterations  or  modifications  in  the  area  of  supply 
comprising the whole or any part of any cantonment, aerodrome, fortress, arsenal, dockyard or camp 
or any building or place in the occupation of the Government for defence purposes, the Appropriate 
Commission shall not make any alterations or modifications except with the consent of the Central 
Government; 

(c) where any alterations or modifications in a licence are proposed to be made otherwise than on 
the application of the licensee, the Appropriate Commission shall publish the proposed alterations or 
modifications with such particulars and in such manner as may be specified; 

(d)  the  Appropriate  Commission  shall  not  make  any  alterations  or  modifications  unless  all 
suggestions  or  objections  received  within  thirty  days  from  the  date  of  the  first  publication  of  the 
notice have been considered. 

19. Revocation of licence.–(1) If the Appropriate Commission, after making an enquiry, is satisfied 

that public interest so requires, it may revoke a licence in any of the following cases, namely:– 

(a)  where  the  licensee,  in  the  opinion  of  the  Appropriate  Commission,  makes  wilful  and 
prolonged default in doing anything required of him by or under this Act or the rules or regulations 
made thereunder; 

(b) where the licensee breaks any of the terms or conditions of his licence the breach of which is 

expressly declared by such licence to render it liable to revocation; 

(c)  where the licensee fails,  within  the  period  fixed in  this  behalf  by  his licence,  or  any  longer 

period which the Appropriate Commission may have granted therefor– 

(i) to show, to the satisfaction of the Appropriate Commission, that he is in a position fully 

and efficiently to discharge the duties and obligations imposed on him by his licence; or 

(ii) to make the deposit or furnish the security, or pay the fees or other charges required by his 

licence; 

(d) where in the opinion of the Appropriate Commission the financial position of the licensee is 
such that he is unable fully and efficiently to discharge the duties and obligations imposed on him by 
his licence. 

(2)  Where  in  its  opinion  the  public  interest  so  requires,  the  Appropriate  Commission  may,  on 
application, or with the consent of the licensee, revoke his licence as to the whole or any part of his area 
of distribution or transmission or trading upon such terms and conditions as it thinks fit. 

(3) No licence shall be revoked under sub-section (1) unless the Appropriate Commission has given 
to the licensee not less than three months’ notice, in writing, stating the grounds on which it is proposed 

20 

 
to revoke the licence, and has considered any cause shown by the licensee within the period of that notice, 
against the proposed revocation. 

(4) The Appropriate Commission may, instead of revoking a licence under sub-section (1), permit it 
to remain in force subject to such further terms and conditions as it thinks fit to impose, and any further 
terms and conditions so imposed shall be binding upon and be observed by the licensee and shall be of 
like force and effect as if they were contained in the licence. 

(5) Where the Commission revokes a licence under this section, it shall serve a notice of revocation 

upon the licensee and fix a date on which the revocation shall take effect. 

(6)  Where  the  Appropriate  Commission  has  given  notice  for  revocation  of  licence  under                

sub-section (5), without prejudice to any penalty which may be imposed or prosecution proceeding which 
may be initiated under this Act, the licensee may, after prior approval of that Commission, sell his utility 
to any person who is found eligible by that Commission for grant of licence. 

20. Sale of utilities of licensees.–(1) Where the Appropriate Commission revokes under section 19 

the licence of any licensee, the following provisions shall apply, namely:– 

(a) the Appropriate Commission shall invite applications for acquiring the utility of the licensee 
whose  licence  has  been  revoked  and  determine  which  of  such  applications  should  be  accepted, 
primarily on the basis of the highest and best price offered for the utility; 

(b) the Appropriate Commission may, by notice in writing, require the licensee to sell his utility 
and thereupon the licensee shall sell his utility to the person (hereafter in this section referred to as the 
“purchaser”) whose application has been accepted by that Commission; 

(c)  all  the  rights,  duties,  obligations  and  liabilities  of  the  licensee,  on  and  from  the  date  of 
revocation of licence or on and from the date, if earlier, on which the utility of the licensee is sold to a 
purchaser, shall absolutely cease except for any liabilities which have accrued prior to that date; 

(d) the Appropriate Commission may make such interim arrangements in regard to the operation 

of the utility as may be considered appropriate including the appointment of Administrators; 

(e) The Administrator appointed under clause (d) shall exercise such powers and discharge such 

functions as the Appropriate Commission may direct. 

(2) Where a utility is sold under sub-section (1), the purchaser shall pay to the licensee the purchase 

price of the utility in such manner as may be agreed upon. 

(3) Where the Appropriate Commission issues any notice under sub-section (1) requiring the licensee 
to  sell  the  utility,  it  may,  by  such  notice,  require  the  licensee  to  deliver  the  utility,  and  thereupon  the 
licensee shall deliver on a date specified in the notice, the utility to the designated purchaser on payment 
of the purchase price thereof. 

(4) Where the licensee has delivered the utility referred to in sub-section (3) to the purchaser but its 
sale has not been completed by the date fixed in the notice issued under that sub-section, the Appropriate 
Commission may, if it deems fit, permit the intending purchaser to operate and maintain the utility system 
pending the completion of the sale. 

21. Vesting of utility in purchaser.–Where a utility is sold under section 20 or section 24, then, upon 
completion of the sale or on the date on which the utility is delivered to the intending purchaser, as the 
case may be, whichever is earlier– 

(a) the utility shall vest in the purchaser or the intending purchaser, as the case may be, free from 

any debt, mortgage or similar obligation of the licensee or attaching to the utility: 

Provided that any such debt, mortgage or similar obligation shall attach to the purchase money in 

substitution for the utility; and 

21 

 
(b) the rights,  powers,  authorities,  duties and  obligations  of  the  licensee  under his licence  shall 

stand transferred to the purchaser and such purchaser shall be deemed to be the licensee. 

22. Provisions where no purchase takes place.–(1) If the utility is not sold in the manner provided 
under section 20 or section 24, the Appropriate Commission may, to protect the interest of consumers or 
in  the  public  interest,  issue  such  directions  or  formulate  such  scheme  as  it  may  deem  necessary  for 
operation of the utility. 

(2)  Where  no  directions  are  issued  or  scheme  is  formulated  by  the  Appropriate  Commission  under 
sub-section  (1),  the  licensee  referred  to  in  section  20  or  section  24  may  dispose  of  the  utility  in  such 
manner as it may deem fit: 

Provided that, if the licensee does not dispose of the utility, within a period of six months from the 
date of revocation, under section 20 or section 24, the Appropriate Commission may cause the works of 
the licensee in, under, over, along, or across any street or public land to be removed and every such street 
or public land to be reinstated, and recover the cost of such removal and reinstatement from the licensee. 

23. Directions to licensees.–If the Appropriate Commission is of the opinion that it is necessary or 
expedient so to do for maintaining the efficient supply, securing the equitable distribution of electricity 
and promoting competition, it may, by order, provide for regulating supply, distribution, consumption or 
use thereof. 

24.  Suspension  of  distribution  licence  and  sale  of  utility.–(1)  If  at  any  time  the  Appropriate 

Commission is of the opinion that a distribution licensee– 

(a) has persistently failed to maintain uninterrupted supply of electricity conforming to standards 

regarding quality of electricity to the consumers; or 

(b)  is  unable  to  discharge  the  functions  or  perform  the  duties  imposed  on  it  by  or  under  the 

provisions of this Act; or 

(c)  has  persistently  defaulted  in  complying  with  any  direction  given  by  the  Appropriate 

Commission under this Act; or 

(d) has broken the terms and conditions of licence,  

and circumstances exist which render it necessary for it in public interest so to do, the Appropriate 
Commission may, for reasons to be recorded in writing, suspend, for a period not exceeding one year, 
the licence of the distribution licensee and appoint an Administrator to discharge the functions of the 
distribution licensee in accordance with the terms and conditions of the licence: 

Provided that before suspending a licence under this section, the Appropriate Commission shall 
give a reasonable opportunity to the distribution licensee to make representations against the proposed 
suspension of licence and shall consider the representations, if any, of the distribution licensee. 

(2) Upon suspension of licence under sub-section (1) the utilities of the distribution licensee shall 
vest in the Administrator for a period not exceeding one year or up to the date on which such utility is 
sold in accordance with the provisions contained in section 20, whichever is later. 

(3)  The  Appropriate  Commission  shall,  within  one  year  of  appointment  of  the  Administrator 
under  sub-section  (1),  either  revoke  the  licence  in  accordance  with  the  provisions  contained  in      
section 19 or revoke suspension of the licence and restore the utility to the distribution licensee whose 
licence had been suspended, as the case may be. 

(4) In a case where the Appropriate Commission revokes the licence under sub-section (3), the 
utility of the distribution licensee shall be sold within a period of one year from the date of revocation 
of  the  licence  in  accordance  with  the  provisions  of  section  20  and  the  price  after  deducting  the 
administrative and other expenses on sale of utilities be remitted to the distribution licensee. 

22 

 
PART V 

TRANSMISSION OF ELECTRICITY 
Inter-State transmission 

25. Inter-State, regional and inter-regional transmission.–For the purposes of this Part, the Central 
Government  may,  make  region-wise  demarcation  of  the  country,  and,  from  time  to  time,  make  such 
modifications  therein  as  it  may  consider  necessary  for  the  efficient,  economical  and  integrated 
transmission  and  supply  of  electricity,  and  in  particular  to  facilitate  voluntary  inter-connections  and        
co-ordination  of facilities for  the  inter-State,  regional  and  inter-regional  generation  and  transmission  of 
electricity. 

26.  National  Load  Despatch  Centre.–(1)  The  Central  Government  may  establish  a  Centre  at  the 
national level, to be known as the National Load Despatch Centre for optimum scheduling and despatch 
of electricity among the Regional Load Despatch Centres. 

(2)  The  constitution  and  functions  of  the  National  Load  Despatch  Centre  shall  be  such  as  may  be 

prescribed by the Central Government: 

Provided  that  the  National  Load  Despatch  Centre  shall  not  engage  in  the  business  of  trading  in 

electricity. 

(3) The National Load Despatch Centre shall be operated by a Government company or any authority 
or corporation established or constituted by or under any Central Act, as may be notified by the Central 
Government. 

27. Constitution of Regional Load Despatch Centre.–(1) The Central Government shall establish a 
Centre for each region to be known as the Regional Load Despatch Centre having territorial jurisdiction 
as determined by the Central Government in accordance with section 25 for the purposes of exercising the 
powers and discharging the functions under this Part. 

(2) The Regional Load Despatch Centre shall be operated by a Government company or any authority 
or corporation established or constituted by or under any Central Act, as may be notified by the Central 
Government: 

Provided that until a Government company or authority or corporation referred to in this sub-section 
is notified by the Central Government, the Central Transmission Utility shall operate the Regional Load 
Despatch Centre: 

Provided further that no Regional Load Despatch Centre shall engage in the business of generation of 

electricity or trading in electricity. 

28. Functions of Regional Load Despatch Centre.–(1) The Regional Load Despatch Centre shall be 

the apex body to ensure integrated operation of the power system in the concerned region. 

(2)  The  Regional  Load  Despatch  Centre  shall  comply  with  such  principles,  guidelines  and 
methodologies in respect of wheeling and optimum scheduling and despatch of electricity as the Central 
Commission may specify in the Grid Code. 

(3) The Regional Load Despatch Centre shall– 

(a)  be  responsible  for  optimum  scheduling  and  despatch  of  electricity  within  the  region,  in 
accordance with the contracts entered into with the licensees or the generating companies operating in 
the region; 

(b) monitor grid operations; 

(c) keep accounts of quantity of electricity transmitted through the regional grid; 

23 

 
 
 
(d) exercise supervision and control over the inter-State transmission system; and 

(e) be responsible for carrying out real time operations for grid control and despatch of electricity 
within the region through secure and economic operation of the regional grid in accordance with the 
Grid Standards and the Grid Code. 

(4)  The  Regional  Load  Despatch  Centre  may  levy  and  collect  such  fee  and  charges  from  the 
generating companies or licensees engaged in inter-State transmission of electricity as may be specified 
by the Central Commission. 

29. Compliance of directions.–(1) The Regional Load Despatch Centre may give such directions and 
exercise such supervision and control as may be required for ensuring stability of grid operations and for 
achieving the maximum economy and efficiency in the operation of the power system in the region under 
its control. 

(2)  Every  licensee,  generating  company,  generating  station,  sub-station  and  any  other  person 
connected with the operation of the power system shall comply with the directions issued by the Regional 
Load Despatch Centres under sub-section (1). 

(3) All directions issued by the Regional Load Despatch Centres to any transmission licensee of State 
transmission lines or any other licensee of the State or generating company (other than those connected to 
inter-State  transmission  system)  or  sub-station  in  the  State  shall  be  issued  through  the  State  Load 
Despatch Centre and the State Load Despatch Centres shall ensure that such directions are duly complied 
with by the licensee or generating company or sub-station. 

(4)  The  Regional  Power  Committee  in  the  region  may,  from  time  to  time,  agree  on  matters 
concerning the stability and smooth operation of the integrated grid and economy and efficiency in the 
operation of the power system in that region. 

(5)  If  any  dispute  arises  with  reference  to  the  quality  of  electricity  or  safe,  secure  and  integrated 
operation  of  the  regional  grid  or  in  relation  to  any  direction  given  under  sub-section  (1),  it  shall  be 
referred to the Central Commission for decision: 

Provided that pending the decision of the Central Commission, the directions of the Regional Load 
Despatch  Centre  shall  be  complied  with  by  the  State  Load  Despatch  Centre  or  the  licensee  or  the 
generating company, as the case may be. 

(6) If any licensee, generating company or any other person fails to comply with the directions issued 

under sub-section (2) or sub-section (3), he shall be liable to a penalty not exceeding rupees fifteen lacs. 

Intra-State transmission 

30. Transmission within a State.–The State Commission shall facilitate and promote transmission, 
wheeling  and  inter-connection  arrangements  within  its  territorial  jurisdiction  for  the  transmission  and 
supply of electricity by economical and efficient utilisation of the electricity. 

31.  Constitution  of  State  Load  Despatch  Centres.–(1)  The  State  Government  shall  establish  a 
Centre  to  be  known  as  the  State  Load  Despatch  Centre  for  the  purposes  of  exercising  the  powers  and 
discharging the functions under this Part. 

(2) The State Load Despatch Centre shall be operated by a Government company or any authority or 
corporation  established  or  constituted  by  or  under  any  State  Act,  as  may  be  notified  by  the  State 
Government: 

Provided  that  until  a  Government  company  or  any  authority  or  corporation  is  notified  by  the  State 

Government, the State Transmission Utility shall operate the State Load Despatch Centre: 

Provided  further  that  no  State  Load  Despatch  Centre  shall  engage  in  the  business  of  trading  in 

electricity. 

24 

 
32. Functions  of  State  Load  Despatch  Centres.–(1)  The  State Load  Despatch Centre  shall be the 

apex body to ensure integrated operation of the power system in a State. 

(2) The State Load Despatch Centre shall– 

(a)  be  responsible  for  optimum  scheduling  and  despatch  of  electricity  within  a  State,  in 
accordance with the contracts entered into with the licensees or the generating companies operating in 
that State; 

(b) monitor grid operations; 

(c) keep accounts of the quantity of electricity transmitted through the State grid; 

(d) exercise supervision and control over the intra-State transmission system; and 

(e) be responsible for carrying out real time operations for grid control and despatch of electricity 
within the State through secure and economic operation of the State grid in accordance with the Grid 
Standards and the State Grid Code. 

(3) The State Load Despatch Centre may levy and collect such fee and charges from the generating 
companies  and  licensees  engaged  in  intra-State  transmission  of  electricity  as  may  be  specified  by  the 
State Commission. 

33.  Compliance  of  directions.–(1)  The  State  Load  Despatch  Centre  in  a  State  may  give  such 
directions and exercise such supervision and control as may be required for ensuring the integrated grid 
operations and for achieving the maximum economy and efficiency in the operation of power system in 
that State. 

(2)  Every  licensee,  generating  company,  generating  station,  sub-station  and  any  other  person 
connected  with  the  operation  of  the  power  system  shall  comply  with  the  directions  issued  by  the  State 
Load Depatch Centre under sub-section (1). 

(3) The State Load Despatch Centre shall comply with the directions of the Regional Load Despatch 

Centre. 

(4)  If  any  dispute  arises  with  reference  to  the  quality  of  electricity  or  safe,  secure  and  integrated 
operation of the State grid or in relation to any direction given under sub-section (1), it shall be referred to 
the State Commission for decision: 

Provided  that  pending  the  decision  of  the  State  Commission,  the  directions  of  the  State  Load 

Despatch Centre shall be complied with by the licensee or generating company. 

(5) If any licensee, generating company or any other person fails to comply with the directions issued 

under sub-section (1), he shall be liable to a penalty not exceeding rupees five lacs. 

Other provisions relating to transmission 

34.  Grid  Standards.–Every  transmission  licensee  shall  comply  with  such  technical  standards,  of 
operation  and  maintenance  of  transmission  lines,  in  accordance  with  the  Grid  Standards,  as  may  be 
specified by the Authority. 

35.  Intervening  transmission  facilities.–The  Appropriate  Commission  may,  on  an  application  by 
any licensee, by order require any other licensee owning or operating intervening transmission facilities to 
provide the use of such facilities to the extent of surplus capacity available with such licensee: 

Provided that any dispute, regarding the extent of surplus capacity available with the licensee, shall be 

adjudicated upon by the Appropriate Commission. 

25 

 
36.  Charges  for  intervening  transmission  facilities.–(1)  Every  licensee  shall,  on  an  order  made 
under section 35, provide his intervening transmission facilities at rates, charges and terms and conditions 
as may be mutually agreed upon: 

Provided that the Appropriate Commission may specify rates, charges and terms and conditions if 

these cannot be mutually agreed upon by the licensees. 

(2)  The  rates,  charges  and  terms  and  conditions  referred  to  in  sub-section  (1)  shall  be  fair  and 

reasonable, and may be allocated in proportion to the use of such facilities. 

Explanation.–For  the  purposes  of  sections  35  and  36,  the  expression  “intervening  transmission 
facilities”  means  the  electric  lines  owned  or  operated  by  a  licensee  where  such  electric  lines  can  be 
utilised for transmitting electricity for and on behalf of another licensee at his request and on payment of a 
tariff or charge. 

37. Directions by Appropriate Government.–The Appropriate Government may issue directions to 
the Regional Load Despatch Centres or State Load Despatch Centres, as the case may be, to take such 
measures as may be necessary for maintaining smooth and stable transmission and supply of electricity to 
any region or State. 

38.  Central  Transmission  Utility  and  functions.–(1)  The  Central  Government  may  notify  any 

Government company as the Central Transmission Utility: 

Provided  that  the  Central  Transmission  Utility  shall  not  engage  in  the  business  of  generation  of 

electricity or trading in electricity: 

Provided  further  that  the  Central  Government  may  transfer,  and  vest  any  property,  interest  in 
property,  rights  and  liabilities  connected  with,  and  personnel  involved  in  transmission  of  electricity  of 
such Central Transmission Utility, to a company or companies to be incorporated under the Companies 
Act, 1956 (1 of 1956) to function as a transmission licensee, through a transfer scheme to be effected in 
the manner specified under Part XIII and such company or companies shall be deemed to be transmission 
licensees under this Act. 

(2) The functions of the Central Transmission Utility shall be– 

(a) to undertake transmission of electricity through inter-State transmission system; 

(b)  to  discharge  all  functions  of  planning  and  co-ordination  relating  to  inter-State  transmission 

system with– 

(i) State Transmission Utilities; 

(ii) Central Government; 

(iii) State Governments; 

(iv) generating companies; 

(v) Regional Power Committees; 

(vi) Authority; 

(vii) licensees; 

(viii) any other person notified by the Central Government in this behalf; 

(c)  to  ensure  development  of  an  efficient,  co-ordinated  and  economical  system  of  inter-State 

transmission lines for smooth flow of electricity from generating stations to the load centres; 

(d) to provide non-discriminatory open access to its transmission system for use by– 

(i) any licensee or generating company on payment of the transmission charges; or 

26 

 
(ii) any consumer as and when such open access is provided by the State Commission under 
sub-section (2) of section 42, on payment of the transmission charges and a surcharge thereon, as 
may be specified by the Central Commission: 

Provided  that  such  surcharge  shall  be  utilised  for  the  purpose  of  meeting  the  requirement  of 

current level cross-subsidy: 

Provided further that such surcharge and cross subsidies shall be progressively reduced  1*** in 

the manner as may be specified by the Central Commission: 

2* 

* 

* 

* 

*: 

Provided also that the manner of payment and utilisation of the surcharge shall be specified by the 

Central Commission: 

Provided also that such surcharge shall not be leviable in case open access is provided to a person 
who has established a captive generating plant for carrying the electricity to the destination of his own 
use. 

39. State Transmission Utility and functions.–(1) The State Government may notify the Board or a 

Government company as the State Transmission Utility: 

Provided that the State Transmission Utility shall not engage in the business of trading in electricity: 

Provided further that the State Government may transfer, and vest any property, interest in property, 
rights and liabilities connected with, and personnel involved in transmission of electricity, of such State 
Transmission  Utility,  to  a  company  or  companies  to  be  incorporated  under  the  Companies  Act,  1956         
(1 of 1956) to function as transmission licensee through a transfer scheme to be effected in the manner 
specified under Part XIII and such company or companies shall be deemed to be transmission licensees 
under this Act. 

(2) The functions of the State Transmission Utility shall be– 

(a) to undertake transmission of electricity through intra-State transmission system; 

(b) to discharge all functions of planning and co-ordination relating to intra-State transmission 

system with– 

(i) Central Transmission Utility; 

(ii) State Governments; 

(iii) generating companies; 

(iv) Regional Power Committees; 

(v) Authority; 

(vi) licensees; 

(vii) any other person notified by the State Government in this behalf; 

(c)  to  ensure  development  of  an  efficient,  co-ordinated  and  economical  system  of  intra-State 

transmission lines for smooth flow of electricity from a generating station to the load centers; 

(d) to provide non-discriminatory open access to its transmission system for use by– 

(i) any licensee or generating company on payment of the transmission charges; or 

1. The words “and eliminated” omitted by Act 26 of 2007, s. 4 (w.e.f. 15-6-2007). 
2. The third proviso omitted by s. 4, ibid. (w.e.f. 15-6-2007). 

27 

 
 
 
 
 
 
 
 
                                                           
(ii) any consumer as and when such open access is provided by the State Commission under   

sub-section (2) of section 42, on payment of the transmission charges and a surcharge thereon, as 
may be specified by the State Commission: 

Provided that such surcharge shall be utilised for the purpose of meeting the requirement of 

current level cross-subsidy: 

Provided further that such surcharge and cross subsidies shall be progressively reduced 1*** 

in the manner as may be specified by the State Commission: 

2* 

* 

* 

* 

*: 

Provided also that the manner of payment and utilisation of the surcharge shall be specified by the 

State Commission: 

Provided also that such surcharge shall not be leviable in case open access is provided to a person 
who has established a captive generating plant for carrying the electricity to the destination of his own 
use. 

40. Duties of transmission licensees.–It shall be the duty of a transmission licensee– 

(a)  to  build,  maintain  and  operate  an  efficient,  co-ordinated  and  economical  inter-State 

transmission system or intra-State transmission system, as the case may be; 

(b)  to  comply  with  the  directions  of  the  Regional  Load  Despatch  Centre  and  the  State  Load 

Despatch Centre, as the case may be; 

(c) to provide non-discriminatory open access to its transmission system for use by– 

(i) any licensee or generating company on payment of the transmission charges; or 

(ii) any consumer as and when such open access is provided by the State Commission under 
sub-section (2) of section 42, on payment of the transmission charges and a surcharge thereon, as 
may be specified by the State Commission: 

Provided that such surcharge shall be utilised for the purpose of meeting the requirement of current 

level cross-subsidy: 

Provided further that  such surcharge  and  cross  subsidies shall  be progressively  reduced  3***  in  the 

manner as may be specified by the Appropriate Commission: 

1. The words “and eliminated” omitted by Act 26 of 2007, s. 5 (w.e.f. 15-6-2007).  
2. The third proviso omitted by s. 5, ibid. (w.e.f. 15-6-2007). 
3. The words “and eliminated” omitted by s. 6, ibid. (w.e.f. 15-6-2007). 

28 

 
 
 
 
 
 
 
 
 
 
                                                           
 
 
 
 
 
1* 

* 

* 

* 

* 

Provided also that the manner of payment and utilisation of the surcharge shall be specified by the 

Appropriate Commission: 

 Provided also that such surcharge shall not be leviable in case open access is provided to a person 
who  has  established  a  captive  generating  plant for  carrying  the  electricity to the  destination  of  his own 
use. 

41. Other business of transmission licensee.–A transmission licensee may, with prior intimation to 

the Appropriate Commission, engage in any business for optimum utilisation of its assets: 

Provided that a proportion of the revenues derived from such business shall, as may be specified by 

the Appropriate Commission, be utilised for reducing its charges for transmission and wheeling: 

Provided  further  that  the  transmission  licensee  shall  maintain  separate  accounts  for  each  such 
business  undertaking  to  ensure  that  transmission  business  neither  subsidises  in  any  way  such  business 
undertaking nor encumbers its transmission assets in any way to support such business: 

Provided also that no transmission licensee shall enter into any contract or otherwise engage in the 

business of trading in electricity. 

PART VI 

DISTRIBUTION OF ELECTRICITY 

Provisions with respect to distribution licensees 

42. Duties of distribution licensee and open access.–(1) It shall be the duty of a distribution licensee 
to  develop  and  maintain  an  efficient,  co-ordinated  and  economical  distribution  system  in  his  area  of 
supply and to supply electricity in accordance with the provisions contained in this Act. 

(2) The State Commission shall introduce open access in such phases and subject to such conditions, 
(including the cross subsidies, and other operational constraints) as may be specified within one year of 
the  appointed  date  by  it  and  in  specifying  the  extent  of  open  access  in  successive  phases  and  in 
determining the charges for wheeling, it shall have due regard to all relevant factors including such cross 
subsidies, and other operational constraints: 

Provided  that  2[such  open  access  shall  be  allowed  on  payment  of  a  surcharge]  in  addition  to  the 

charges for wheeling as may be determined by the State Commission: 

Provided  further  that  such  surcharge  shall  be  utilised  to  meet  the  requirements  of  current  level  of 

cross subsidy within the area of supply of the distribution licensee: 

Provided  also  that  such  surcharge  and  cross  subsidies  shall  be  progressively  reduced  3***  in  the 

manner as may be specified by the State Commission: 

Provided  also  that such surcharge  shall not  be leviable in  case  open access is provided to  a person 
who  has  established  a  captive  generating  plant for  carrying  the  electricity to the  destination  of  his own 
use: 

1. The Third proviso omitted by Act 26 of 2007, s. 6 (w.e.f. 15-6-2007). 
2. Subs. by s.7, ibid., for “such open access may be allowed before the cross subsidies are eliminated on payment of a surcharge” 

(w.e.f. 15-6-2007). 

3. The words “and eliminated” omitted by s. 7, ibid. (w.e.f. 15-6-2007). 

29 

 
 
 
 
 
 
 
 
 
 
 
                                                           
 
1[Provided  also  that  the  State  Commission  shall,  not  later  than  five  years  from  the  date  of 
commencement  of  the  Electricity  (Amendment)  Act,  2003  (57  of  2003),  by  regulations,  provide  such 
open access to all consumers who require a supply of electricity where the maximum power to be made 
available at any time exceeds one megawatt.] 

 (3)  Where  any  person,  whose  premises  are  situated  within  the  area  of  supply  of  a  distribution 
licensee,  (not  being  a  local  authority  engaged  in  the  business  of  distribution  of  electricity  before  the 
appointed date) requires a supply of electricity from a generating company or any licensee other than such 
distribution  licensee,  such  person  may,  by  notice,  require  the  distribution  licensee  for  wheeling  such 
electricity in accordance with regulations made by the State Commission and the duties of the distribution 
licensee  with  respect  to  such  supply  shall  be  of  a  common  carrier  providing  non-discriminatory  open 
access. 

(4)  Where  the  State  Commission  permits  a  consumer  or  class  of  consumers  to  receive  supply  of 
electricity from a person other than the distribution licensee of his area of supply, such consumer shall be 
liable  to  pay  an  additional  surcharge  on  the  charges  of  wheeling,  as  may  be  specified  by  the  State 
Commission, to meet the fixed cost of such distribution licensee arising out of his obligation to supply. 

(5)  Every  distribution licensee shall,  within six  months  from  the  appointed  date  or  date  of  grant  of 
licence, whichever is earlier, establish a forum for redressal of grievances of the consumers in accordance 
with the guidelines as may be specified by the State Commission. 

(6) Any consumer, who is aggrieved by non-redressal of his grievances under sub-section (5), may 
make a representation for the redressal of his grievance to an authority to be known as Ombudsman to be 
appointed or designated by the State Commission. 

(7) The Ombudsman shall settle the grievance of the consumer within such time and in such manner 

as may be specified by the State Commission. 

(8)  The  provisions  of  sub-sections  (5),  (6)  and  (7)  shall  be  without  prejudice  to  right  which  the 

consumer may have apart from the rights conferred upon him by those sub-sections. 

43.  Duty  to  supply  on  request.–(1)  2[Save  as  otherwise  provided  in  this  Act,  every  distribution] 
licensee, shall, on an application by the owner or occupier of any premises, give supply of electricity to 
such premises, within one month after receipt of the application requiring such supply: 

Provided that where such supply requires extension of distribution mains, or commissioning of new 
sub-stations, the distribution licensee shall supply the electricity to such premises immediately after such 
extension or commissioning or within such period as may be specified by the Appropriate Commission: 

Provided  further  that  in  case  of  a  village  or  hamlet  or  area  wherein  no  provision  for  supply  of 
electricity exists, the Appropriate Commission may extend the said period as it may consider necessary 
for electrification of such village or hamlet or area. 

3[Explanation.–For the purposes of this sub-section, “application” means the application complete in 
all  respects  in  the  appropriate  form,  as  required  by  the  distribution  licensee,  along  with  documents 
showing payment of necessary charges and other compliances.] 

1. Ins. by Act 57 of 2003, s. 3 (w.e.f. 27-1-2004). 
2. Subs. by Act 26 of 2007, s. 8, for “Every distribution” (w.e.f. 15-6- 2007). 
3. Ins. by s. 8, ibid. (w.e.f. 15-6-2007). 

30 

 
 
 
                                                           
 
 
 
(2) It shall be the duty of every distribution licensee to provide, if required, electric plant or electric 

line for giving electric supply to the premises specified in sub-section (1): 

Provided  that  no  person  shall  be  entitled  to  demand,  or  to  continue  to  receive,  from  a  licensee  a 
supply of electricity for any premises having a separate supply unless he has agreed with the licensee to 
pay to him such price as determined by the Appropriate Commission. 

(3)  If  a  distribution  licensee  fails  to  supply  the  electricity  within  the  period  specified  in                  

sub-section (1), he shall be liable to a penalty which may extend to one thousand rupees for each day of 
default. 

44. Exceptions from duty to supply electricity.–Nothing contained in section 43 shall be taken as 
requiring a distribution licensee to give supply of electricity  to any premises if he is prevented from so 
doing by cyclone, floods, storms or other occurrences beyond his control. 

45. Power to recover charges.–(1) Subject to the provisions of this section, the prices to be charged 
by  a  distribution  licensee  for  the  supply  of  electricity  by  him  in  pursuance  of  section  43  shall  be  in 
accordance with such tariffs fixed from time to time and conditions of his licence. 

(2) The charges for electricity supplied by a distribution licensee shall be– 

(a) fixed in accordance with the methods and the principles as may be specified by the concerned 

State Commission; 

(b) published in such manner so as to give adequate publicity for such charges and prices. 

(3) The charges for electricity supplied by a distribution licensee may include–  

(a) a fixed charge in addition to the charge for the actual electricity supplied; 

(b)  a  rent  or  other  charges  in  respect  of  any  electric  meter  or  electrical  plant  provided  by  the 

distribution licensee. 

(4) Subject to the provisions of section 62, in fixing charges under this section a distribution licensee 
shall not show undue preference to any person or class of persons or discrimination against any person or 
class of persons. 

(5) The charges fixed by the distribution licensee shall be in  accordance with the provisions of this 

Act and the regulations made in this behalf by the concerned State Commission. 

46.  Power  to  recover  expenditure.–The  State  Commission  may,  by  regulations,  authorise  a 
distribution licensee to charge from a person requiring a supply of electricity in pursuance of section 43 
any expenses reasonably incurred in providing any electric line or electrical plant used for the purpose of 
giving that supply. 

47. Power to require security.–(1) Subject to the provisions of this section, a distribution licensee 
may  require  any  person,  who  requires  a  supply  of  electricity  in  pursuance  of  section  43,  to  give  him 
reasonable  security,  as  may  be  determined  by  regulations,  for  the  payment  to  him  of  all  monies  which 
may become due to him– 

(a) in respect of the electricity supplied to such persons; or 

(b)  where  any  electric  line  or  electrical  plant  or  electric  meter  is  to  be  provided  for  supplying 

electricity to such person, in respect of the provision of such line or plant or meter, 

and if that person fails to give such security, the distribution licensee may, if he thinks fit, refuse to give 
the supply of electricity or to provide the line or plant or meter for the period during which the failure 
continues. 

(2) Where any person has not given such security as is mentioned in sub-section (1) or the security 
given by any person has become invalid or insufficient, the distribution licensee may, by notice, require 
that  person,  within  thirty  days  after  the  service  of  the  notice,  to  give  him  reasonable  security  for  the 

31 

 
payment of all monies which may become due to him in respect of the supply of electricity or provision 
of such line or plant or meter. 

(3) If the person referred to in sub-section (2) fails to give such security, the distribution licensee may, 

if he thinks fit, discontinue the supply of electricity for the period during which the failure continues. 

(4)  The  distribution  licensee  shall  pay  interest  equivalent  to  the  bank  rate  or  more,  as  may  be 
specified  by  the  concerned  State  Commission,  on the  security  referred  to in  sub-section  (1)  and refund 
such security on the request of the person who gave such security. 

(5)  A  distribution  licensee  shall  not  be  entitled  to  require  security  in  pursuance  of  clause  (a)  of      

sub-section  (1)  if the  person  requiring the  supply  is  prepared  to  take  the supply  through a  pre-payment 
meter. 

48.  Additional  terms  of  supply.–A  distribution  licensee  may  require  any  person  who  requires  a 

supply of electricity in pursuance of section 43 to accept– 

(a) any restrictions which may be imposed for the purpose of enabling the distribution licensee to 

comply with the regulations made under section 53; 

(b) any terms restricting any liability of the distribution licensee for economic loss resulting from 

negligence of the person to whom the electricity is supplied. 

49.  Agreements  with  respect  to  supply  or  purchase  of  electricity.–Where  the  Appropriate 
Commission  has  allowed  open  access  to  certain  consumers  under  section  42,  such  consumers, 
notwithstanding the provisions contained in clause (d) of sub-section (1) of section 62, may enter into an 
agreement with any person for supply or purchase of electricity on such terms and conditions (including 
tariff) as may be agreed upon by them. 

1[50. The Electricity supply code.–The State Commission shall specify an electricity supply code to 
provide  for  recovery  of  electricity  charges,  intervals  for  billing  of  electricity  charges,  disconnection  of 
supply of electricity for non-payment thereof, restoration of supply of electricity, measures for preventing 
tampering, distress or damage to electrical plant or electrical line or meter, entry of distribution licensee 
or any person acting on his behalf for disconnecting supply and removing the meter, entry for replacing, 
altering or maintaining electric lines or electrical plants or meter and such other matters.] 

51. Other businesses of distribution licensees.–A distribution licensee may, with prior intimation to 

the Appropriate Commission, engage in any other business for optimum utilisation of its assets:  

Provided that a proportion of the revenues derived from such business shall, as may be specified by 

the concerned State Commission, be utilised for reducing its charges for wheeling: 

Provided further that the distribution licensee shall maintain separate accounts for each such business 
undertaking to ensure that distribution business neither subsidises in any way such business undertaking 
nor encumbers its distribution assets in any way to support such business: 

Provided also that nothing contained in this section shall apply to a local authority engaged, before 

the commencement of this Act, in the business of distribution of electricity. 

Provisions with respect to electricity traders 

52. Provisions with respect to electricity trader.–(1) Without prejudice to the provisions contained 
in clause (c) of section 12, the Appropriate Commission may, specify the technical requirement, capital 
adequacy requirement and credit worthiness for being an electricity trader. 

(2) Every electricity trader shall discharge such duties, in relation to supply and trading in electricity, 

as may be specified by the Appropriate Commission. 

1. Subs. by Act 26 of 2007, s. 9, for section 50 (w.e.f. 15-6-2007). 

32 

 
 
 
                                                           
Provisions with respect to supply generally 

53. Provision relating to safety and electricity supply.–The Authority may, in consultation with the 

State Government, specify suitable measures for– 

(a)  protecting  the  public  (including  the  persons  engaged  in  the  generation,  transmission  or 
distribution  or  trading)  from  dangers  arising  from  the  generation,  transmission  or  distribution  or 
trading of electricity, or use of electricity supplied or installation, maintenance or use of any electric 
line or electrical plant; 

(b) eliminating or reducing the risks of personal injury to any person, or damage to property of 

any person or interference with use of such property; 

(c)  prohibiting  the  supply  or  transmission  of  electricity  except  by  means  of  a  system  which 

conforms to the specification as may be specified; 

(d)  giving  notice  in  the  specified  form  to  the  Appropriate  Commission  and  the  Electrical 

Inspector, of accidents and failures of supplies or transmissions of electricity; 

(e) keeping by a generating company or licensee the maps, plans and sections relating to supply 

or transmission of electricity; 

(f) inspection of maps, plans and sections by any person authorised by it or by Electrical Inspector 

or by any person on payment of specified fee; 

(g) specifying action to be taken in relation to any electric line or electrical plant, or any electrical 
appliance  under  the  control  of  a  consumer  for  the  purpose  of  eliminating  or  reducing  the  risk  of 
personal injury or damage to property or interference with its use. 

Karnataka 

STATE AMENDMENT 

Insertion of sections 53A.-In the Electricity Act, 2003 (Central Act 36 of 2003) (herein after referred 

to as Principal Act), after section 53, the following shall be inserted, namely:– 

“53-A. Powers of State Government relating to Safety and Electricity supply.-Where Central 
Government  or  the  Authority  has  made  no  provision  relating  to  following  Safety  measures  and 
electricity supply the State Government may by rules provide for,- 

(a)  terms  and  Conditions  and  manner  of  Inspection  by  the  Chief  Electrical  Inspector  and 

Electrical Inspectors; 

(b) manner of Issue of Licence to electrical contractors, Permits to Supervisors and wiremen 

and competency certificates; 

(c) manner of Scrutiny and approval of Electrical Installation drawings, 

(d) levy of fee for the Inspection or other services rendered by the Chief Electrical Inspector 

or the Electrical Inspectors; and 

(e)  the  rate  and  manner  of  collection  of  fee.  If  not  remitted  within  the  stipulated  time,  to 

recover the same as an arrears of Land revenue.” 

[Vide Karnataka Act 39 of 2014, s. 2] 

54. Control of transmission and use of electricity.–(1) Save as otherwise exempted under this Act, 
no person other than the Central Transmission Utility or a State Transmission Utility, or a licensee shall 
transmit or use electricity at a rate exceeding two hundred and fifty watts and one hundred volts– 

(a) in any street, or 
(b) in any place,– 

33 

 
 
(i) in which one hundred or more persons are ordinarily likely to be assembled; or 
(ii) which is a factory within the meaning of the Factories Act, 1948 (63 of 1948) or a mine 

within the meaning of the Mines Act, 1952 (35 of 1952); or 

(iii)  to  which the  State  Government,  by  general  or special  order,  declares the provisions of 

this sub-section to apply, 

without giving, before the commencement of transmission or use of electricity, not less than seven days’ 
notice  in  writing  of  his  intention  to  the  Electrical  Inspector  and  to  the  District  Magistrate  or  the 
Commissioner of Police, as the case may be, containing particulars of the electrical installation and plant, 
if any, the nature and the purpose of supply and complying with such of the provisions of Part XVII of 
this Act, as may be applicable: 

Provided  that  nothing  in  this  section  shall  apply  to  electricity  used  for  the  public  carriage  of 
passengers, animals or goods, on, or for the lighting or ventilation of the rolling stock of any railway or 
tramway subject to the provisions of the Railways Act, 1989 (24 of 1989). 

(2) Where any difference or dispute arises as to whether a place is or is not one in which one hundred 
or  more  persons  are  ordinarily  likely  to  be  assembled,  the  matter  shall  be  referred  to  the  State 
Government, and the decision of the State Government thereon shall be final. 

(3) The provisions of this section shall be binding on the Government. 

55. Use, etc., of meters.–(1) No licensee shall supply electricity, after the expiry of two years from 
the appointed date, except through installation of a correct meter in accordance with the regulations to be 
made in this behalf by the Authority: 

Provided that the licensee may require the consumer to give him security for the price of a meter and 

enter into an agreement for the hire thereof, unless the consumer elects to purchase a meter: 

Provided further that the State Commission may, by notification, extend the said period of two years 

for a class or classes of persons or for such area as may be specified in that notification. 

(2)  For  proper  accounting  and  audit  in  the  generation,  transmission  and  distribution  or  trading  of 
electricity, the Authority may direct the installation of meters by a generating company or licensee at such 
stages  of  generation,  transmission  or  distribution  or  trading  of  electricity  and  at  such  locations  of 
generation, transmission or distribution or trading, as it may deem necessary. 

(3)  If  a  person  makes  default  in  complying  with  the  provisions  contained  in  this  section  or  the 
regulations made under sub-section (1), the Appropriate Commission may make such order as it thinks fit 
for requiring the default to be made good by the generating company or licensee or by any officers of a 
company or other association or any other person who is responsible for its default. 

56.  Disconnection  of  supply  in  default  of  payment.–(1)  Where  any  person  neglects  to  pay  any 
charge  for  electricity  or  any  sum  other  than  a  charge  for  electricity  due  from  him  to  a  licensee  or  the 
generating company in respect of supply, transmission or distribution or wheeling of electricity to him, 
the  licensee  or  the  generating  company  may,  after  giving  not  less  than  fifteen  clear  days’  notice  in 
writing, to such person and without prejudice to his rights to recover such charge or other sum by suit, cut 
off the supply of electricity and for that purpose cut or disconnect any electric supply line or other works 
being the property of such licensee or the generating company through which electricity may have been 
supplied, transmitted, distributed or wheeled and may discontinue the supply until such charge or other 
sum, together with any expenses incurred by him in cutting off and reconnecting the supply, are paid, but 
no longer: 

Provided that the supply of electricity shall not be cut off if such person deposits, under protest,– 

(a) an amount equal to the sum claimed from him, or 

34 

 
(b) the electricity charges due from him for each month calculated on the basis of average charge 

for electricity paid by him during the preceding six months, 

whichever is less, pending disposal of any dispute between him and the licensee. 

(2) Notwithstanding anything contained in any other law for the time being in force, no sum due from 
any consumer, under this section shall be recoverable after the period of two years from the date when 
such  sum  became  first  due  unless  such  sum  has  been  shown  continuously  as  recoverable  as  arrear  of 
charges for electricity supplied and the licensee shall not cut off the supply of the electricity. 

Consumer protection: Standards of performance 

57. Standards of performance of licensee.–(1) The Appropriate Commission may, after consultation 
with the licensees and persons likely to be affected, specify standards of performance of a licensee or a 
class of licensees. 

(2) If a licensee fails to meet the standards specified under sub-section (1), without prejudice to any 
penalty which may be imposed or prosecution be initiated, he shall be liable to pay such compensation to 
the person affected as may be determined by the Appropriate Commission: 

Provided  that  before  determination  of  compensation,  the  concerned  licensee  shall  be  given  a 

reasonable opportunity of being heard. 

(3)  The  compensation  determined  under  sub-section  (2)  shall  be  paid  by  the  concerned  licensee 

within ninety days of such determination. 

58.  Different  standards  of  performance  by  licensee.–The  Appropriate  Commission  may  specify 

different standards under sub-section (1) of section 57 for a class or classes of licensees. 

59. Information with respect to levels of performance.–(1) Every licensee shall, within the period 
specified  by  the  Appropriate  Commission,  furnish  to  the  Commission  the  following  information, 
namely:– 

(a) the level of performance achieved under sub-section (1) of section 57; 

(b) the number of cases in which compensation was made under sub-section (2) of section 57 and 

the aggregate amount of the compensation. 

(2) The Appropriate Commission shall at least once in every year arrange for the publication, in such 

form  and  manner  as  it  considers  appropriate,  of  such  of  the  information  furnished  to  it  under                
sub-section (1). 

60.  Market  domination.–The  Appropriate  Commission  may  issue  such  directions  as  it  considers 
appropriate to a licensee or a generating company if such licensee or generating company enters into any 
agreement or abuses its dominant position or enters into a combination which is likely to cause or causes 
an adverse effect on competition in electricity industry. 

PART VII 

TARIFF 

61.  Tariff  regulations.–The  Appropriate  Commission  shall,  subject  to  the  provisions  of  this  Act, 
specify the terms and conditions for the determination of tariff, and in doing so, shall be guided by the 
following, namely:– 

(a) the principles and methodologies specified by the Central Commission for determination of 

the tariff applicable to generating companies and transmission licensees; 

(b)  the  generation,  transmission,  distribution  and  supply  of  electricity  are  conducted  on 

commercial principles; 

35 

 
(c) the factors which would encourage competition, efficiency, economical use of the resources, 

good performance and optimum investments; 

(d) safeguarding of consumers' interest and at the same time, recovery of the cost of electricity in 

a reasonable manner; 

(e) the principles rewarding efficiency in performance; 

(f) multi year tariff principles; 
1[(g)  that  the  tariff  progressively  reflects  the  cost  of  supply  of  electricity  and  also  reduces      

cross-subsidies in the manner specified by the Appropriate Commission;] 

(h)  the  promotion  of  co-generation  and  generation  of  electricity  from  renewable  sources  of 

energy; 

(i) the National Electricity Policy and tariff policy: 

Provided that the terms and conditions for determination of tariff under the Electricity (Supply) Act, 
1948  (54  of  1948),  the  Electricity  Regulatory  Commission  Act,  1998  (14  of  1998)  and  the  enactments 
specified in the Schedule as they stood immediately before the appointed date, shall continue to apply for 
a period of one year or until the terms and conditions for tariff are specified under this section, whichever 
is earlier. 

62.  Determination  of  tariff.–(1)  The  Appropriate  Commission  shall  determine  the  tariff  in 

accordance with the provisions of this Act for– 

(a) supply of electricity by a generating company to a distribution licensee: 

Provided that the Appropriate Commission may, in case of shortage of supply of electricity, fix 
the  minimum  and  maximum  ceiling  of  tariff  for  sale  or  purchase  of  electricity  in  pursuance  of  an 
agreement,  entered  into  between  a  generating  company  and  a  licensee  or  between  licensees,  for  a 
period not exceeding one year to ensure reasonable prices of electricity; 

(b) transmission of electricity; 

(c) wheeling of electricity; 

(d) retail sale of electricity: 

Provided  that  in  case  of  distribution  of  electricity  in  the  same  area  by  two  or  more  distribution 
licensees, the Appropriate Commission may, for promoting competition among distribution licensees, fix 
only maximum ceiling of tariff for retail sale of electricity. 

(2) The Appropriate Commission may require a licensee or a generating company to furnish separate 
details,  as  may  be  specified  in respect  of  generation,  transmission  and  distribution for determination  of 
tariff. 

(3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue 
preference to any consumer of electricity but may differentiate according to the consumer's load factor, 
power factor, voltage, total consumption of electricity during any specified period or the time at which the 
supply is required or the geographical position of any area, the nature of supply and the purpose for which 
the supply is required. 

(4)  No  tariff  or  part  of  any  tariff  may  ordinarily  be  amended,  more  frequently  than  once  in  any 
financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge 
formula as may be specified. 

1. Subs. by Act 26 of 2007, s. 10, for clause (g) (w.e.f. 15-6-2007). 

36 

 
                                                           
(5) The Commission may require a licensee or a generating company to comply with such procedures 
as  may  be  specified  for calculating  the  expected  revenues from  the tariff  and  charges  which  he  or it  is 
permitted to recover. 

(6) If any licensee or a generating company recovers a price or charge exceeding the tariff determined 
under  this  section,  the  excess  amount  shall  be  recoverable  by  the  person  who  has  paid  such  price  or 
charge along with interest equivalent to the bank rate without prejudice to any other liability incurred by 
the licensee. 

63. Determination of tariff by bidding process.–Notwithstanding anything contained in section 62, 
the Appropriate Commission shall adopt the tariff if such tariff has been determined through transparent 
process of bidding in accordance with the guidelines issued by the Central Government. 

64. Procedure for tariff order.–(1) An application for determination of tariff under section 62 shall 
be made by a generating company or licensee in such manner and accompanied by such fee, as may be 
determined by regulations. 

(2)  Every  applicant  shall  publish  the  application,  in  such  abridged  form  and  manner,  as  may  be 

specified by the Appropriate Commission. 

(3)  The  Appropriate  Commission  shall,  within  one  hundred  and  twenty  days  from  receipt  of  an 
application under sub-section (1) and after considering all suggestions and objections received from the 
public,– 

(a)  issue  a  tariff  order  accepting  the  application  with  such  modifications  or  such  conditions  as 

may be specified in that order; 

(b)  reject  the  application  for  reasons  to  be  recorded  in  writing  if  such  application  is  not  in 
accordance  with  the  provisions  of  this  Act  and  the  rules  and  regulations  made  thereunder  or  the 
provisions of any other law for the time being in force: 

Provided that an applicant shall be given a reasonable opportunity of being heard before rejecting his 

application. 

(4) The  Appropriate  Commission  shall,  within  seven  days  of  making  the  order,  send  a  copy  of  the 
order  to  the  Appropriate  Government,  the  Authority,  and  the  concerned  licensees  and  to  the  person 
concerned. 

(5) Notwithstanding anything contained in Part X, the tariff for any inter-State supply, transmission or 
wheeling of electricity, as the case may be, involving the territories of two States may, upon application 
made  to  it  by  the  parties  intending  to  undertake  such  supply,  transmission  or  wheeling,  be  determined 
under this section by the State Commission having jurisdiction in respect of the licensee who intends to 
distribute electricity and make payment therefor. 

(6) A tariff order shall, unless amended or revoked, continue to be in force for such period as may be 

specified in the tariff order. 

65. Provision of subsidy by State Government.–If the State Government requires the grant of any 
subsidy to any consumer or class of consumers in the tariff determined by the State Commission under 
section  62,  the  State  Government  shall,  notwithstanding  any  direction  which  may  be  given  under        
section  108,  pay,  in  advance  and  in  such  manner  as  may  be  specified,  the  amount  to  compensate  the 
person affected by the grant of subsidy in the manner the State Commission may direct, as a condition for 
the  licence  or  any  other  person  concerned  to  implement  the  subsidy  provided  for  by  the  State 
Government: 

Provided that no such direction of the State Government shall be operative if the payment is not made 
in accordance with the provisions contained in this section and the tariff fixed by the State Commission 
shall be applicable from the date of issue of orders by the Commission in this regard. 

37 

 
66.  Development  of  market.–The  Appropriate  Commission  shall  endeavour  to  promote  the 
development of a market (including trading) in power in such manner as may be specified and shall be 
guided by the National Electricity Policy referred to in section 3 in this regard. 

PART VIII 

WORKS 

Works of licensees 

67. Provision as to opening up of streets, railways, etc.–(1) A licensee may, from time to time but 
subject  always  to  the  terms  and  conditions  of  his  licence,  within  his  area  of  supply  or  transmission  or 
when permitted by the terms of his licence to lay down or place electric supply lines without the area of 
supply, without that area carry out works such as– 

(a) to open and break up the soil and pavement of any street, railway or tramway; 

(b) to open and break up any sewer, drain or tunnel in or under any street, railway or tramway; 

(c) to alter the position of any line or works or pipes, other than a main sewer pipe; 

(d) to lay down and place electric lines, electrical plant and other works; 

(e) to repair, alter or remove the same; 

(f) to do all other acts necessary for transmission or supply of electricity. 

(2) The Appropriate Government may, by rules made by it in this behalf, specify,– 

(a) the cases and circumstances in which the consent in writing of the appropriate Government, 

local authority, owner or occupier, as the case may be, shall be required for carrying out works; 

(b) the authority which may grant permission in the circumstances where the owner or occupier 

objects to the carrying out of works; 

(c) the nature and period of notice to be given by the licensee before carrying out works; 

(d)  the  procedure  and  manner  of  consideration  of  objections  and  suggestions  received  in 

accordance with the notice referred to in clause (c); 

(e)  the  determination  and  payment  of  compensation  or  rent  to  the  persons  affected  by  works 

under this section; 

(f) the repairs and works to be carried out when emergency exists; 

(g)  the  right  of  the  owner  or  occupier  to  carry  out  certain  works  under  this  section  and  the 

payment of expenses therefor; 

(h) the procedure for carrying out other works near sewers, pipes or other electric lines or works; 

(i)  the  procedure for  alteration  of  the  position  of  pipes,  electric  lines,  electrical  plant,  telegraph 

lines, sewer lines, tunnels, drains, etc.; 

(j) the procedure for fencing, guarding, lighting and other safety  measures relating to works on 

streets, railways, tramways, sewers, drains or tunnels and immediate reinstatement thereof; 

(k)  the  avoidance  of  public  nuisance,  environmental  damage  and  unnecessary  damage  to  the 

public and private property by such works; 

(l) the procedure for undertaking works which are not reparable by the Appropriate Government, 

licensee or local authority; 

(m)  the  manner  of  deposit  of  amount  required  for  restoration  of  any  railways,  tramways, 

waterways, etc.; 

38 

 
(n) the manner of restoration of property affected by such works and maintenance thereof; 

(o) the procedure for deposit of compensation payable by the licensee and furnishing of security; 

and 

(p) such other matters as are incidental or consequential to the construction and maintenance of 

works under this section. 

(3) A licensee shall, in exercise of any of the powers conferred by or under this section and the rules 
made  thereunder,  cause  as  little  damage,  detriment  and  inconvenience  as  may  be,  and  shall  make  full 
compensation  for  any  damage,  detriment  or  inconvenience  caused  by  him  or  by  any  one  employed  by 
him. 

(4) Where any difference or dispute [including amount of compensation under sub-section (3)] arises 

under this section, the matter shall be determined by the Appropriate Commission. 

(5)  The  Appropriate  Commission,  while  determining  any  difference  or  dispute  arising  under  this 
section in addition to any compensation under sub-section (3), may impose a penalty not exceeding the 
amount of compensation payable under that sub-section. 

Provisions relating to overhead lines 

68. Overhead lines.–(1) An overhead line shall, with prior approval of the Appropriate Government, 

be installed or kept installed above ground in accordance with the provisions of sub-section (2). 

(2) The provisions contained in sub-section (1) shall not apply– 

(a) in relation to an electric line which has a nominal voltage not exceeding 11 kilovolts and is 

used or intended to be used for supplying to a single consumer; 

(b) in relation to so much of an electric line as is or will be within premises in the occupation or 

control of the person responsible for its installation; or 

(c) in such other cases, as may be prescribed. 

(3) The Appropriate Government shall, while granting approval under sub-section (1), impose such 
conditions  (including  conditions  as  to  the  ownership  and  operation  of  the  line)  as  appear  to  it  to  be 
necessary. 

(4) The Appropriate Government may vary or revoke the approval at any time after the end of such 

period as may be stipulated in the approval granted by it. 

 (5)  Where  any  tree  standing  or  lying  near  an  overhead  line  or  where  any  structure  or  other  object 
which  has  been  placed  or  has  fallen  near  an  overhead  line  subsequent  to  the  placing  of  such  line, 
interrupts or interferes with, or is likely to interrupt or interfere with, the conveyance or transmission of 
electricity  or  the  accessibility  of  any  works,  an  Executive  Magistrate  or  authority  specified  by  the 
Appropriate Government may, on the application of the licensee, cause the tree, structure or object to be 
removed or otherwise dealt with as he or it thinks fit. 

(6)  When  disposing  of  an  application  under  sub-section  (5),  an  Executive  Magistrate  or  authority 
specified  under  that  sub-section  shall,  in  the  case  of  any  tree  in  existence  before  the  placing  of  the 
overhead line, award to the person interested in the tree such compensation as he thinks reasonable, and 
such person may recover the same from the licensee. 

Explanation.–For the purposes of this  section, the expression “tree” shall be deemed to include any 

shrub, hedge, jungle growth or other plant. 

69.  Notice  to  telegraph  authority.–(1)  A licensee shall,  before laying  down or  placing,  within  ten 
meters of any telegraph line, electric line, electrical plant or other works, not being either service lines, or 

39 

 
electric  lines  or  electrical  plant,  for  the  repair,  renewal  or  amendment  of  existing  works  of  which  the 
character or position is not to be altered,– 

(a) submit a proposal in case of a new installation to an authority to be designated by the Central 

Government and such authority shall take a decision on the proposal within thirty days; 

(b)  give  not  less  than  ten  days'  notice  in  writing  to  the  telegraph  authority  in  case  of  repair, 

renewal or amendment of existing works, specifying– 

(i) the course of the works or alterations proposed; 

(ii) the manner in which the works are to be utilised; 

(iii) the amount and nature of the electricity to be transmitted; 

(iv) the extent to, and the manner in which (if at all), earth returns are to be used, 

and the licensee shall conform to such reasonable requirements, either general or special, as may be laid 
down  by  the  telegraph  authority  within  that  period  for  preventing  any  telegraph  line  from  being 
injuriously affected by such works or alterations: 

Provided that in case of emergency (which shall be stated by the licensee in writing to the telegraph 
authority) arising from defects in any of the electric lines or electrical plant or other works of the licensee, 
the  licensee  shall  be  required  to  give  only  such  notice  as  may  be  possible  after  the  necessity  for  the 
proposed new works or alterations has arisen. 

(2) Where the works of the laying or placing of any service line is to be executed, the licensee shall, 
not less than forty-eight hours before commencing the work, serve upon the telegraph authority a notice 
in writing of his intention to execute such works. 

PART IX 

CENTRAL ELECTRICITY AUTHORITY 

Constitution and functions of Authority 

70. Constitution, etc., of Central Electricity Authority.–(1) There shall be a body to be called the 
Central  Electricity  Authority  to  exercise  such  functions  and  perform  such  duties  as  are  assigned  to  it 
under this Act. 

(2)  The  Central  Electricity  Authority,  established  under  section  3  of  the  Electricity  (Supply)  Act, 
1948  (54  of  1948)  and  functioning  as  such immediately  before  the  appointed  date,  shall  be  the  Central 
Electricity  Authority  for  the  purposes  of  this  Act  and  the  Chairperson,  Members,  Secretary  and  other 
officers  and  employees  thereof  shall  be  deemed  to  have  been  appointed  under  this  Act  and  they  shall 
continue  to  hold  office  on  the  same  terms  and  conditions  on  which  they  were  appointed  under  the 
Electricity (Supply) Act, 1948. 

(3)  The  Authority  shall  consist  of  not  more  than  fourteen  Members  (including  its  Chairperson)  of 

whom not more than eight shall be full-time Members to be appointed by the Central Government. 

(4)  The  Central  Government  may  appoint  any  person,  eligible  to  be  appointed  as  Member  of  the 
Authority,  as  the  Chairperson  of  the  Authority,  or,  designate  one  of  the  full-time  Members  as  the 
Chairperson of the Authority. 

(5) The Members of the Authority shall be appointed from amongst persons of ability, integrity and 
standing  who  have  knowledge  of,  and  adequate  experience  and  capacity  in,  dealing  with  problems 
relating  to  engineering,  finance,  commerce,  economics  or  industrial  matters,  and  at  least  one  Member 
shall be appointed from each of the following categories, namely:– 

40 

 
(a)  engineering  with  specialisation  in  design,  construction,  operation  and  maintenance  of 

generating stations; 

(b) engineering with specialisation in transmission and supply of electricity; 

(c) applied research in the field of electricity; 

(d) applied economics, accounting, commerce or finance. 

(6) The Chairperson and all the Members of the Authority shall hold office during the pleasure of the 

Central Government. 

(7) The Chairperson shall be the Chief Executive of the Authority. 

(8) The headquarters of the Authority shall be at Delhi. 

(9) The Authority shall meet at the head office or any other place at such time as the Chairperson may 
direct, and shall observe such rules of procedure in regard to the transaction of business at its meetings 
(including the quorum at its meetings) as it may specify. 

(10)  The  Chairperson,  or  if  he  is  unable  to  attend  a  meeting  of  the  Authority,  any  other  Member 
nominated by the Chairperson in this behalf and in the absence of such nomination or where there is no 
Chairperson,  any  Member  chosen  by  the  Members  present  from  among  themselves  shall  preside  at  the 
meeting. 

(11) All questions which come up before any meeting of the Authority shall be decided by a majority 
of votes of the Members present and voting, and in the event of an equality of votes, the Chairperson or 
the person presiding shall have the right to exercise a second or casting vote. 

(12)  All  orders  and  decisions  of  the  Authority  shall  be  authenticated  by  the  Secretary  or  any  other 

officer of the Authority duly authorised by the Chairperson in this behalf. 

(13) No act or proceeding of the Authority shall be questioned or shall be invalidated merely on the 

ground of existence of any vacancy in, or any defect in, the constitution of, the Authority. 

(14)  The  Chairperson  of  the  Authority  and  other  full-time  Members  shall  receive  such  salary  and 
allowances  as  may  be  determined  by  the  Central  Government  and  other  Members  shall  receive  such 
allowances  and  fees  for  attending  the  meetings  of  the  Authority,  as  the  Central  Government  may 
prescribe. 

(15)  The  other  terms  and  conditions  of  service  of  the  Chairperson  and  Members  of  the  Authority 
including, subject to the provisions of sub-section (6), their terms of office shall be such as the Central 
Government may prescribe. 

71.  Members  not  to  have  certain  interest.–No  Member  of  the  Authority  shall  have  any  share  or 
interest, whether in his own name or otherwise, in any company or other body corporate or an association 
of persons (whether incorporated or not) or a firm engaged in the business of generation, transmission, 
distribution and trading of electricity or fuel for the generation thereof or in the manufacture of electrical 
equipment. 

72. Officers and staff of Authority.–The Authority may appoint a Secretary and such other officers 
and employees as it considers necessary for the performance of its functions under this Act and on such 
terms  as  to  salary,  remuneration,  fee,  allowance,  pension,  leave  and  gratuity,  as  the  authority  may  in 
consultation with the Central Government, fix: 

Provided  that  the  appointment  of  the  Secretary  shall  be  subject  to  the  approval  of  the  Central 

Government. 

73.  Functions  and  duties of  Authority.–The  Authority  shall  perform  such  functions  and  duties  as 

the Central Government may prescribe or direct, and in particular to– 

41 

 
(a)  advise  the  Central  Government  on  the  matters  relating  to  the  national  electricity  policy, 
formulate short-term and perspective plans for development of the electricity system and co-ordinate 
the activities of the planning agencies for the optimal utilisation of resources to subserve the interests 
of the national economy and to provide reliable and affordable electricity for all consumers; 

(b)  specify  the  technical  standards  for  construction  of  electrical  plants,  electric  lines  and 

connectivity to the grid; 

(c)  specify  the  safety  requirements  for  construction,  operation  and  maintenance  of  electrical 

plants and electric lines; 

(d) specify the Grid Standards for operation and maintenance of transmission lines; 

(e) specify the conditions for installation of meters for transmission and supply of electricity; 

(f)  promote  and  assist  in  the  timely  completion  of  schemes  and  projects  for  improving  and 

augmenting the electricity system; 

(g) promote measures for advancing the skill of persons engaged in the electricity industry; 

(h)  advise  the  Central  Government  on  any  matter  on  which  its  advice  is  sought  or  make 
recommendation  to  that  Government  on  any  matter  if,  in  the  opinion  of  the  Authority,  the 
recommendation  would  help  in  improving  the  generation,  transmission,  trading,  distribution  and 
utilisation of electricity; 

(i) collect and record the data concerning the generation, transmission, trading, distribution and 
utilisation  of  electricity  and  carry  out  studies  relating  to  cost,  efficiency,  competitiveness  and  such 
like matters; 

(j)  make  public  from  time  to  time  the  information  secured  under  this  Act,  and  provide  for  the 

publication of reports and investigations; 

(k) promote research in matters affecting the generation, transmission, distribution and trading of 

electricity; 

(l)  carry  out,  or  cause  to  be  carried  out,  any  investigation  for  the  purposes  of  generating  or 

transmitting or distributing electricity; 

(m) advise any State Government, licensees or the generating companies on such matters which 
shall enable them to operate and maintain the electricity system under their ownership or control in an 
improved manner and where necessary, in co-ordination with any other Government, licensee or the 
generating company owning or having the control of another electricity system; 

(n) advise the Appropriate Government and the Appropriate Commission on all technical matters 

relating to generation, transmission and distribution of electricity; and 

(o) discharge such other functions as may be provided under this Act. 

Certain powers and directions 

74.  Power  to  require  statistics  and  returns.–It  shall  be  the  duty  of  every  licensee,  generating 
company or person generating electricity for its or his own use to furnish to the Authority such statistics, 
returns or other information relating to generation, transmission, distribution, trading and use of electricity 
as it may require and at such times and in such form and manner as may be specified by the Authority. 

75.  Directions  by  Central  Government  to  Authority.–(1)  In  the  discharge  of  its  functions,  the 
Authority shall be guided by such directions in matters of policy involving public interest as the Central 
Government may give to it in writing. 

42 

 
 
(2)  If  any  question  arises  as  to  whether  any  such  direction  relates  to  a  matter  of  policy  involving 

public interest, the decision of the Central Government thereon shall be final. 

PART X 
REGULATORY COMMISSIONS 

Constitution, powers and functions of Central Commission 

76.  Constitution  of  Central  Commission.–(1)  There  shall  be  a  Commission  to  be  known  as  the 
Central  Electricity  Regulatory  Commission  to  exercise  the  powers  conferred  on,  and  discharge  the 
functions assigned to it under this Act. 

(2)  The  Central  Electricity  Regulatory  Commission,  established  under  section  3  of  the  Electricity 
Regulatory  Commissions  Act,  1998  (14  of  1998)  and  functioning  as  such  immediately  before  the 
appointed  date,  shall  be  deemed  to  be  the  Central  Commission  for  the  purposes  of  this  Act  and  the 
Chairperson, Members, Secretary, and other officers and employees thereof shall be deemed to have been 
appointed  under  this  Act  and  they  shall  continue  to  hold  office  on  the  same  terms  and  conditions  on 
which they were appointed under the Electricity Regulatory Commissions Act, 1998: 

Provided that the Chairperson and other Members of the Central Commission appointed, before the 
commencement of this Act, under the Electricity Regulatory Commissions Act, 1998 (14 of 1998), may, 
on the recommendations of the Selection Committee constituted under sub-section (1) of section 78, be 
allowed, to opt for the terms and conditions under this Act by the Central Government. 

(3)  The  Central  Commission  shall  be  a  body  corporate  by  the  name  aforesaid,  having  perpetual 
succession  and  a  common  seal  with  power to  acquire,  hold  and dispose  of property,  both  movable  and 
immovable, and to contract and shall, by the said name, sue or be sued. 

(4) The head office of the Central Commission shall be at such place as the Central Government may, 

by notification, specify. 

(5) The Central Commission shall consist of the following Members, namely:– 

(a) a Chairperson and three other Members; 
(b) the Chairperson of the Authority who shall be the Member, ex officio. 

(6)  The  Chairperson  and  Members  of  the  Central  Commission  shall  be  appointed  by  the  Central 

Government on the recommendation of the Selection Committee referred to in section 78. 

77. Qualifications for appointment of Members of Central Commission.–(1) The Chairperson and 
the Members of the Central Commission shall be persons having adequate knowledge of, or experience 
in,  or  shown  capacity  in,  dealing  with,  problems  relating  to  engineering,  law,  economics,  commerce, 
finance or management and shall be appointed in the following manner, namely:– 

(a) one person having qualifications and experience in the field of engineering with specialisation 

in generation, transmission or distribution of electricity; 

(b) one person having qualifications and experience in the field of finance; 
(c) two persons having qualifications and experience in the field of economics, commerce, law or 

management: 

Provided  that  not  more  than  one  Member  shall  be  appointed  under  the  same  category  under 

clause (c). 

(2) Notwithstanding anything contained in sub-section (1), the Central Government may appoint any 
person as the Chairperson from amongst persons who is, or has been, a Judge of the Supreme Court or the 
Chief Justice of a High Court: 

43 

 
 
 
Provided that no appointment under this sub-section shall be made except after consultation with the 

Chief Justice of India. 

(3) The Chairperson or any other Member of the Central Commission shall not hold any other office. 

(4) The Chairperson shall be the Chief Executive of the Central Commission. 

78.  Constitution  of  Selection  Committee to  recommend Members.–(1) The Central  Government 
shall,  for  the  purposes  of  selecting  the  Members  of  the  Appellate  Tribunal  and  the  Chairperson  and 
Members of the Central Commission, constitute a Selection Committee consisting of– 

(a) Member of the Planning Commission incharge of the energy sector ………… Chairperson; 

(b)  Secretary-in-charge of the Ministry of the Central Government dealing with the Department  

of Legal Affairs …………. Member; 

(c)  Chairperson of the Public Enterprises Selection Board …….Member; 

(d)  a  person 
to  be  nominated  by 
sub-section (2)………………… Member; 

the  Central  Government 

in  accordance  with  

(e)  a  person  to  be  nominated  by  the  Central  Government  in  accordance  with  sub-section 
(3)……………….. Member; 

(f)  Secretary-in-charge  of 
power………….Member. 

the  Ministry  of 

the  Central  Government  dealing  with 

(2)  For  the  purposes  of  clause  (d)  of  sub-section  (1),  the  Central  Government  shall  nominate  from 
amongst persons holding the post of chairperson or managing director, by whatever name called, of any 
public financial institution specified in section 4A of the Companies Act, 1956 (1 of 1956). 

(3) For the purposes of clause (e) of sub-section (1), the Central Government shall, by notification, 
nominate from amongst persons holding the post of director or the head of the institution, by whatever 
name called, of any research, technical or management institution for this purpose. 

(4)  Secretary-in-charge  of  the Ministry  of the  Central  Government  dealing  with Power  shall  be the 

Convenor of the Selection Committee. 

(5) The Central Government shall, within one month from the date of occurrence of any vacancy by 
reason of death, resignation or removal of a Member of the Appellate Tribunal or the Chairperson or a 
Member  of  the  Central  Commission  and  six  months  before  the  superannuation  or  end  of  tenure  of  the 
Member  of  the  Appellate  Tribunal  or  Member  of  the  Central  Commission,  make  a  reference  to  the 
Selection Committee for filling up of the vacancy. 

(6) The Selection Committee shall finalise the selection of the Chairperson and Members referred to 

in sub-section (5) within three months from the date on which the reference is made to it. 

(7) The Selection Committee shall recommend a panel of two names for every vacancy referred to it. 

(8)  Before recommending  any  person  for  appointment  as  Member  of  the  Appellate Tribunal  or the 
Chairperson or other Member of the Central Commission, the Selection Committee shall satisfy itself that 
such  person  does  not  have  any  financial  or  other  interest  which  is  likely  to  affect  prejudicially  his 
functions as the Chairperson or Member. 

(9)  No  appointment  of  the  Chairperson  or  other  Member  shall  be  invalid  merely  by  reason  of  any 

vacancy in the Selection Committee: 

44 

 
Provided  that  nothing  contained  in  this  section  shall  apply  to  the  appointment  of  a  person  as  the 
Chairperson of the Central Commission where such person is, or has been, a Judge of the Supreme Court 
or the Chief Justice of a High Court. 

79. Functions of Central Commission.–(1) The Central Commission shall discharge the following 

functions, namely:– 

(a) to regulate the tariff of generating companies owned or controlled by the Central Government; 

(b)  to  regulate  the  tariff  of  generating  companies  other  than  those  owned  or  controlled  by  the 
Central Government specified in clause (a), if such generating companies enter into or otherwise have 
a composite scheme for generation and sale of electricity in more than one State; 

(c) to regulate the inter-State transmission of electricity; 

(d) to determine tariff for inter-State transmission of electricity; 

(e)  to  issue  licences  to  persons  to  function  as  transmission  licensee  and  electricity  trader  with 

respect to their inter-State operations; 

(f) to adjudicate upon disputes involving generating companies or transmission licensee in regard 

to matters connected with clauses (a) to (d) above and to refer any dispute for arbitration; 

(g) to levy fees for the purposes of this Act; 

(h) to specify Grid Code having regard to Grid Standards; 

(i) to specify and enforce the standards with respect to quality, continuity and reliability of service 

by licensees; 

(j) to fix the trading margin in the inter-State trading of electricity, if considered, necessary; 

(k) to discharge such other functions as may be assigned under this Act. 

(2)  The  Central  Commission  shall  advise  the  Central  Government  on  all  or  any  of  the  following 

matters, namely:– 

(i) formulation of National electricity Policy and tariff policy; 

(ii) promotion of competition, efficiency and economy in activities of the electricity industry; 

(iii) promotion of investment in electricity industry; 

(iv) any other matter referred to the Central Commission by that Government. 

(3) The Central Commission shall ensure transparency while exercising its powers and discharging its 

functions. 

(4) In discharge of its functions, the Central Commission shall be guided by the National Electricity 

Policy, National Electricity Plan and tariff policy published under section 3. 

80. Central Advisory Committee.–(1) The Central Commission may, by notification, establish with 
effect  from  such  date  as  it  may  specify  in  such  notification,  a  Committee  to  be  known  as  the  Central 
Advisory Committee. 

(2) The Central Advisory Committee shall consist of not more than thirty-one members to represent 
the  interests  of  commerce,  industry,  transport,  agriculture,  labour,  consumers,  non-governmental 
organisations and academic and research bodies in the electricity sector. 

(3)  The  Chairperson  of  the  Central  Commission  shall  be  the  ex  officio  Chairperson  of  the  Central 
Advisory Committee and the Members of that Commission and Secretary to the Government of India in 

45 

 
charge  of  the  Ministry  or  Department  of  the  Central  Government  dealing  with  Consumer  Affairs  and 
Public Distribution System shall be the ex officio Members of the Committee. 

81. Objects of Central Advisory Committee.–The objects of the Central Advisory Committee shall 

be to advise the Central Commission on– 

(i) major questions of policy; 

(ii) matters relating to quality, continuity and extent of service provided by the licensees; 

(iii) compliance by the licensees with the conditions and requirements of their licence; 

(iv) protection of consumer interest; 

(v) electricity supply and overall standards of performance by utilities. 

Constitution, powers and functions of State Commissions 

82. Constitution of State Commission.–(1) Every State Government shall, within six months from 
the appointed date, by notification, constitute for the purposes of this Act, a Commission for the State to 
be known as the (name of the State) Electricity Regulatory Commission: 

Provided that the State Electricity Regulatory Commission, established by a State Government under 
section  17  of  the  Electricity  Regulatory  Commissions  Act,  1998  (14  of  1998)  and  the  enactments 
specified  in  the  Schedule,  and  functioning  as  such  immediately  before  the  appointed  date,  shall  be  the 
State Commission for the purposes of this Act and the Chairperson, Members, Secretary, and officers and 
other employees thereof shall continue to hold office, on the same terms and conditions on which they 
were appointed under those Acts: 

Provided further that the Chairperson and other Members of the State Commission appointed, before 
the commencement of this Act, under the Electricity Regulatory Commissions Act, 1998 (14 of 1998) or 
under the enactments specified in the Schedule, may, on the recommendations of the Selection Committee 
constituted under sub-section (1) of section 85, be allowed to opt for the terms and conditions under this 
Act by the concerned State Government. 

(2)  The  State  Commission  shall  be  a  body  corporate  by  the  name  aforesaid,  having  perpetual 
succession and a common seal, with power to acquire, hold and dispose of property, both movable and 
immovable, and to contract and shall, by the said name, sue or be sued. 

(3) The head office of the State Commission shall be at such place as the State Government may, by 

notification, specify. 

(4) The State Commission shall consist of not more than three Members, including the Chairperson. 

(5)  The  Chairperson  and  Members  of  the  State  Commission  shall  be  appointed  by  the  State 

Government on the recommendation of a Selection Committee referred to in section 85. 

83. Joint Commission.–(1) Notwithstanding anything to the contrary contained in section 82, a Joint 

Commission may be constituted by an agreement to be entered into– 

(a) by two or more Governments of States; or 

(b)  by  the  Central  Government,  in  respect  of  one  or  more  Union  territories,  and  one  or  more 

Governments of States, 

and shall be in force for such period and shall be subject to renewal for each further period, if any, as may 
be stipulated in the agreement: 

Provided  that  the  Joint  Commission,  constituted  under  section  21A  of  Electricity  Regulatory 
Commissions Act, 1998 (14 of 1998) and functioning as such immediately before the appointed day, shall 
be the Joint Commission for the purposes of this Act and the Chairperson, Members, Secretary and other 

46 

 
officers and employees thereof shall be deemed to have been appointed as such under this Act and they 
shall continue to hold office, on the same terms and conditions on which they were appointed under the 
Electricity Regulatory Commissions Act, 1998. 

(2)  The  Joint  Commission  shall  consist  of  one  Member  from  each  of  the  participating  States  and 
Union territories and the Chairperson shall be appointed from amongst the Members by consensus, failing 
which by rotation. 

(3)  An  agreement  under  sub-section  (1)  shall  contain  provisions  as  to  the  name  of  the  Joint 
Commission,  the  manner  in  which  the  participating  States  may  be  associated  in  the  selection  of  the 
Chairperson  and  Members  of  the  Joint  Commission,  manner  of  appointment  of  Members  and 
appointment  of  Chairperson  by  rotation  or  consensus,  places  at  which  the  Commission  shall  sit, 
apportionment  among  the  participating  States  of  the  expenditure  in  connection  with  the  Joint 
Commission,  manner  in  which  the  differences  of  opinion  between  the  Joint  Commission  and  the  State 
Government concerned would be resolved and may also contain such other supplemental, incidental and 
consequential  provisions  not  inconsistent  with  this  Act  as  may  be  deemed  necessary  or  expedient  for 
giving effect to the agreement. 

(4)  The  Joint  Commission  shall  determine  tariff  in  respect  of  the  participating  States  or  Union 

territories separately and independently. 

(5) Notwithstanding anything contained in this section, the Central Government may, if so authorised 
by all the participating States, constitute a Joint Commission and may exercise the powers in respect of all 
or  any  of  the  matters  specified  under  sub-section  (3)  and  when  so  specifically  authorised  by  the 
participating States. 

84. Qualifications for appointment of Chairperson and Members of State Commission.–(1) The 
Chairperson and the Members of the State Commission shall be persons of ability, integrity and standing 
who  have  adequate  knowledge  of,  and  have  shown  capacity  in,  dealing  with  problems  relating  to 
engineering, finance, commerce, economics, law or management. 

(2)  Notwithstanding  anything  contained  in  sub-section  (1),  the  State  Government  may  appoint  any 

person as the Chairperson from amongst persons who is, or has been, a Judge of a High Court: 

Provided that no appointment under this sub-section shall be made except after consultation with the 

Chief Justice of that High Court. 

(3) The Chairperson or any other Member of the State Commission shall not hold any other office. 

(4) The Chairperson shall be the Chief Executive of the State Commission. 

85. Constitution of Selection Committee to select Members of State Commission.–(1) The State 
Government  shall,  for  the  purposes  of  selecting  the  Members  of  the  State  Commission,  constitute  a 
Selection Committee consisting of– 

(a) a person who has been a Judge of the High Court…. Chairperson; 

(b) the Chief Secretary of the concerned State ….Member; 

(c) the Chairperson of the Authority or the Chairperson of the Central Commission ….. Member: 

Provided  that  nothing  contained  in  this  section  shall  apply  to  the  appointment  of  a  person  as  the 

Chairperson who is or has been a Judge of the High Court. 

(2)  The  State  Government  shall,  within  one  month  from  the  date  of  occurrence  of  any  vacancy  by 
reason  of  death,  resignation  or  removal  of  the  Chairperson  or  a  Member  and  six  months  before  the 
superannuation  or  end  of  tenure  of  the  Chairperson  or  Member,  make  a  reference  to  the  Selection 
Committee for filling up of the vacancy. 

47 

 
(3) The Selection Committee shall finalise the selection of the Chairperson and Members within three 

months from the date on which the reference is made to it. 

(4) The Selection Committee shall recommend a panel of two names for every vacancy referred to it. 

(5)  Before  recommending  any  person  for  appointment  as  the  Chairperson  or  other  Member  of  the 
State  Commission,  the  Selection  Committee  shall  satisfy  itself  that  such  person  does  not  have  any 
financial  or  other  interest  which  is  likely  to  affect  prejudicially  his  functions  as  such  Chairperson  or 
Member, as the case may be. 

(6)  No  appointment  of  Chairperson  or  other  Member  shall  be  invalid  merely  by  reason  of  any 

vacancy in the Selection Committee. 

86.  Functions  of  State  Commission.–(1)  The  State  Commission  shall  discharge  the  following 

functions, namely:– 

(a)  determine  the  tariff  for  generation,  supply,  transmission  and  wheeling  of  electricity, 

wholesale, bulk or retail, as the case may be, within the State: 

Provided that where open access has been permitted to a category of consumers under section 42, 
the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the 
said category of consumers; 

(b) regulate electricity purchase and procurement process of distribution licensees including the 
price at which electricity shall be procured from the generating companies or licensees or from other 
sources through agreements for purchase of power for distribution and supply within the State; 

(c) facilitate intra-State transmission and wheeling of electricity; 

(d) issue licences to  persons  seeking  to  act as transmission licensees, distribution licensees and 

electricity traders with respect to their operations within the State; 

(e)  promote  co-generation  and  generation  of  electricity  from  renewable  sources  of  energy  by 
providing suitable measures for connectivity with the grid and sale of electricity to any person, and 
also specify, for purchase of electricity from such sources, a percentage of the total consumption of 
electricity in the area of a distribution licensee; 

(f) adjudicate upon the disputes between the licensees and generating companies and to refer any 

dispute for arbitration; 

(g) levy fee for the purposes of this Act; 

(h)  specify  State  Grid  Code  consistent  with  the  Grid  Code  specified  under  clause  (h)  of           

sub-section (1) of section 79; 

(i)  specify  or  enforce  standards  with  respect  to  quality,  continuity  and  reliability  of  service  by 

licensees; 

(j) fix the trading margin in the intra-State trading of electricity, if considered, necessary; 

(k) discharge such other functions as may be assigned to it under this Act. 

(2) The State Commission shall advise the State Government on all or any of the following matters, 

namely:– 

(i) promotion of competition, efficiency and economy in activities of the electricity industry; 

(ii) promotion of investment in electricity industry; 

(iii) reorganisation and restructuring of electricity industry in the State; 

48 

 
(iv) matters concerning generation, transmission, distribution and trading of electricity or any 

other matter referred to the State Commission by that Government. 

(3) The State Commission shall ensure transparency while exercising its powers and discharging its 

functions. 

(4)  In  discharge  of  its  functions,  the  State  Commission  shall  be  guided  by  the  National  Electricity 

Policy, National Electricity Plan and tariff policy published under section 3. 

87.  State  Advisory  Committee.–(1)  The  State  Commission  may,  by  notification,  establish  with 
effect  from  such  date  as  it  may  specify  in  such  notification,  a  Committee  to  be  known  as  the  State 
Advisory Committee. 

(2) The State Advisory Committee shall consist  of not more than twenty-one members to represent 
the  interests  of  commerce,  industry,  transport,  agriculture,  labour,  consumers,  non-governmental 
organisations and academic and research bodies in the electricity sector. 

(3) The Chairperson of the State Commission shall be the ex officio Chairperson of the State Advisory 
Committee and the Members of the State Commission and the Secretary to State Government in charge of 
the Ministry or Department dealing with Consumer Affairs and Public Distribution System shall be the  
ex officio Members of the Committee. 

88. Objects of State Advisory Committee.–The objects of the State Advisory Committee shall be to 

advise the Commission on– 

(i) major questions of policy; 

(ii) matters relating to quality, continuity and extent of service provided by the licensees; 

(iii) compliance by licensees with the conditions and requirements of their licence; 

(iv) protection of consumer interest; and 

(v) electricity supply and overall standards of performance by utilities. 

Appropriate Commission–other provisions 

89. Term of office and conditions of service of Members.–(1) The Chairperson or other Member 

shall hold office for a term of five years from the date he enters upon his office: 

Provided that the Chairperson or other Member in the Central Commission or the State Commission 
shall  not  be  eligible  for  re-appointment  in  the  same  capacity  as  the  Chairperson  or  a  Member  in  that 
Commission in which he had earlier held office as such: 

Provided further that no Chairperson or Member shall hold office as such after he has attained the age 

of sixty-five years. 

(2) The salary, allowances and other terms and conditions of service of the Chairperson and Members 

shall be such as may be prescribed by the Appropriate Government: 

Provided that the salary, allowances and other terms and conditions of service of the Members, shall 

not be varied to their disadvantage after appointment. 

(3) Every Member shall, before entering upon his office, make and subscribe to an oath of office and 

secrecy in such form and in such manner and before such authority as may be prescribed. 

(4) Notwithstanding anything contained in sub-section (1), a Member may– 

(a) relinquish his office by giving in writing to the Appropriate Government a notice of not less 

than three months; or 

(b) be removed from his office in accordance with the provisions of section 90. 

49 

 
(5) Any member ceasing to hold office as such shall– 

(a) not accept any commercial employment for a period of two years from the date he ceases to 

hold such office; and  

(b)  not  represent  any  person  before  the  Central  Commission  or  any  State  Commission  in  any 

manner. 

Explanation.–For the purposes of this sub-section, “commercial employment” means employment in 
any  capacity  in  any  organisation  which  has  been  a  party  to  the  proceedings  before  the  Appropriate 
Commission  or  employment  in  any  capacity  under,  or  agency  of,  a  person  engaged  in  trading, 
commercial, industrial or financial business in electricity industry and includes a director of a company or 
partner of a firm or setting up practice either independently or as partner of a firm or as an advisor or a 
consultant. 

Andhra Pradesh:  

STATE AMENDMENT 

In  section  89,  in  sub-section  (1),  for  the  existing  two  provisos,  the  following  provisos  shall  be 

substituted, in their application to the State of Andhra Pradesh, namely: 

“Provided  that  the  Chairperson  or  other  Member  in  the  State  Commission  shall  be  eligible  for           

re-appointment in the same capacity and shall hold office as such, till he completes the term of five years 
including the term already held before such re-appointment: 

Provided further that no Chairperson or Member shall hold office as such after he attained the age of 

seventy years.” 

[Vide Andhra Pradesh Act 11 of 2016, s. 3] 

90. Removal of Member.–(1) No Member shall be removed from office except in accordance with 

the provisions of this section. 

(2)  The  Central  Government,  in  the  case  of  a  Member  of  the  Central  Commission,  and  the  State 
Government, in the case of a Member of the State Commission, may  by order remove from office any 
Member, if he– 

(a) has been adjudged an insolvent; 

(b)  has  been  convicted  of  an  offence  which,  in  the  opinion  of  the  Appropriate  Government, 

involves moral turpitude; 

(c) has become physically or mentally incapable of acting as a Member; 

(d) has acquired such financial or other interest as is likely to affect prejudicially his functions as 

a Member; 

(e)  has  so  abused  his  position  as  to  render  his  continuance  in  office  prejudicial  to  the  public 

interest; or 

(f) has been guilty of proved misbehaviour: 

Provided that no Member shall be removed from his office on any ground specified in clauses (d), (e) 
and (f) unless the Chairperson of the Appellate Tribunal on a reference being made to him in this behalf 
by the Central Government or the State Government, as the case may be, has, on an inquiry, held by him 
in  accordance  with  such  procedure  as  may  be  prescribed  by  the  Central  Government,  reported  that  the 
Member ought on such ground or grounds to be removed. 

(3) The Central Government or the State Government, as the case may be, may, in consultation with 
the  Chairperson  of  the  Appellate  Tribunal  suspend  any  Member  of  the  Appropriate  Commission  in 

50 

 
respect  of  whom  a  reference  has  been  made  to  the  Chairperson  of  the  Appellate  Tribunal,  under           
sub-section  (2)  until  the  Central  Government  or  the  State  Government,  as  the  case  may  be,  has  passed 
orders on receipt of the report of the Chairperson of the Appellate Tribunal, on such reference: 

Provided  that  nothing  contained  in  this  section  shall  apply  to  the  Chairperson  of  the  Appropriate 
Commission who, at the time of his appointment as such is a sitting Judge of the Supreme Court or the 
Chief Justice of a High Court or a Judge of a High Court. 

Proceedings and powers of Appropriate Commission 

91.  Secretary,  officers  and  other  employees  of  Appropriate  Commission.–(1)  The  Appropriate 
Commission  may  appoint  a  Secretary  to  exercise  such  powers  and  perform  such  duties  as  may  be 
specified. 

(2) The Appropriate Commission may, with the approval of the Appropriate Government, specify the 

numbers, nature and categories of other officers and employees. 

(3)  The  salaries  and  allowances  payable  to,  and  other  terms  and  conditions  of  service  of,  the 
Secretary,  officers  and  other  employees  shall  be  such  as  may  be  specified  with  the  approval  of  the 
Appropriate Government. 

(4) The Appropriate Commission may appoint consultants required to assist that Commission in the 

discharge of its functions on the terms and conditions as may be specified. 

92. Proceedings  of  Appropriate  Commission.–(1) The  Appropriate  Commission  shall  meet  at the 
head office or any other place at such time as the Chairperson may direct, and shall observe such rules of 
procedure in regard to the transaction of business at its meetings (including the quorum at its meetings) as 
it may specify. 

(2) The Chairperson, or if he is unable to attend a meeting of the Appropriate Commission, any other 
Member  nominated  by  the  Chairperson in  this behalf  and,  in  the  absence  of such  nomination  or  where 
there  is  no  Chairperson,  any  Member  chosen  by  the  Members  present  from  amongst  themselves,  shall 
preside at the meeting. 

(3) All questions which come up before any meeting of the Appropriate Commission shall be decided 
by a majority of votes of the Members present and voting, and in the event of an equality of votes, the 
Chairperson or in his absence, the person presiding shall have a second or casting vote. 

(4) Save as otherwise provided in sub-section (3), every Member shall have one vote. 

(5) All orders and decisions of the Appropriate Commission shall be authenticated by its Secretary or 

any other officer of the Commission duly authorised by the Chairperson in this behalf. 

93.  Vacancies,  etc.,  not  to  invalidate  proceedings.–No  act  or  proceedings  of  the  Appropriate 
Commission shall be questioned or shall be invalidated merely on the ground of existence of any vacancy 
or defect in the constitution of the Appropriate Commission. 

94. Powers of Appropriate Commission.–(1) The Appropriate Commission shall, for the purposes 
of any inquiry or proceedings under this Act, have the same powers as are vested in a civil court under the 
Code of Civil Procedure, 1908 (5 of 1908) in respect of the following matters, namely:– 

(a) summoning and enforcing the attendance of any person and examining him on oath; 

(b) discovery and production of any document or other material object producible as evidence; 

(c) receiving evidence on affidavits; 

(d) requisitioning of any public record; 

(e) issuing commission for the examination of witnesses; 

51 

 
(f) reviewing its decisions, directions and orders; 

(g) any other matter which may be prescribed. 

(2) The Appropriate Commission shall have the powers to pass such interim order in any proceeding, 

hearing or matter before the Appropriate Commission, as that Commission may consider appropriate. 

(3) The Appropriate Commission may authorise any person, as it deems fit, to represent the interest of 

the consumers in the proceedings before it. 

95. Proceedings before Commission.–All proceedings before the Appropriate Commission shall be 
deemed to be judicial proceedings within the meaning of sections 193 and 228 of the Indian Penal Code 
(45  of  1860)  and  the  Appropriate  Commission  shall  be  deemed  to  be  a  civil  court  for  the  purposes  of 
sections 345 and 346 of the Code of Criminal Procedure, 1973 (2 of 1974). 

96. Powers of entry and seizure.–The Appropriate Commission or any officer, not below the rank of 
a Gazette Officer specially authorised in this behalf by the Commission, may enter any building or place 
where  the  Commission  has  reason  to  believe  that  any  document  relating  to  the  subject  matter  of  the 
inquiry may be found, and may seize any such document or take extracts or copies therefrom subject to 
the provisions of section 100 of the Code of Criminal Procedure, 1973 (2 of 1974), in so far as it may be 
applicable. 

97. Delegation.–The Appropriate Commission may, by general or special order in writing, delegate to 
any  Member,  Secretary,  officer  of  the  Appropriate  Commission  or  any  other  person  subject  to  such 
conditions,  if  any,  as  may  be  specified  in  the  order,  such  of  its  powers  and  functions  under  this  Act 
(except  the  powers  to  adjudicate  disputes  under  section  79  and  section  86  and  the  powers  to  make 
regulations under section 178 or section 181) as it may deem necessary. 

Grants, Fund, Accounts, Audit and Report 

98.  Grants  and  loans  by  Central  Government.–The  Central  Government  may,  after  due 
appropriation  made  by  Parliament  in  this  behalf,  make  to  the  Central  Commission  grants  and  loans  of 
such sums of money as that Government may consider necessary. 

99.  Establishment  of Fund  by  Central  Government.–(1) There shall  be  constituted a  Fund to  be 

called the Central Electricity Regulatory Commission Fund and there shall be credited thereto– 

(a)  any  grants  and  loans  made  to  the  Central  Commission  by  the  Central  Government  under 

section 98; 

(b) all fees received by the Central Commission under this Act; 

(c) all sums received by the Central Commission from such other sources as may be decided upon 

by the Central Government. 

(2) The Fund shall be applied for meeting– 

(a)  the  salary,  allowances and  other remuneration  of Chairperson,  Members,  Secretary,  officers 

and other employees of the Central Commission; 

(b) the expenses of the Central Commission in discharge of its functions under section 79; 

(c) the expenses on objects and for purposes authorised by this Act. 

(3) The Central Government may, in consultation with the Comptroller and Auditor-General of India, 
prescribe the manner of applying the Fund for meeting the expenses specified in clause (b) or clause (c) of 
sub-section (2). 

100.  Accounts  and  audit  of  Central  Commission.–(1)  The  Central  Commission  shall  maintain 
proper accounts and other relevant records and prepare an annual statement of accounts in such form as 

52 

 
 
may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General 
of India. 

(2) The accounts of the Central Commission shall be audited by the Comptroller and Auditor-General 
of  India  at such intervals  as  may  be  specified  by  him  and  any  expenditure  incurred in  connection  with 
such audit shall be payable by the Central Commission to the Comptroller and Auditor-General of India. 

(3)  The  Comptroller  and  Auditor-General  of  India  and  any  person  appointed  by  him  in  connection 
with the audit of the accounts of the Central Commission under this Act shall have the same rights and 
privileges and authority in connection with such audit as the Comptroller and Auditor-General of India 
has  in  connection  with  the  audit  of  the  Government  accounts  and,  in  particular,  shall  have  the  right  to 
demand the production of books, accounts, connected vouchers and other documents and papers and to 
inspect any of the offices of the Central Commission. 

(4) The accounts of the Central Commission, as certified by the Comptroller and Auditor-General of 
India or any other person appointed by him in this behalf, together with the audit report thereon, shall be 
forwarded annually to the Central Government and that Government shall cause the same to be laid, as 
soon as may be after it is received, before each House of Parliament. 

101. Annual report of Central Commission.–(1) The Central Commission shall prepare once every 
year,  in  such  form  and  at  such  time  as  may  be  prescribed,  an  annual  report  giving  a  summary  of  its 
activities during the previous year and copies of the report shall be forwarded to the Central Government. 

(2)  A  copy  of  the  report  received  under  sub-section  (1)  shall  be  laid,  as  soon  as  may  be  after  it  is 

received, before each House of Parliament. 

102. Grants and Loans by State Government.–The State Government may, after due appropriation 
made  by  Legislature  of  a  State  in  this  behalf,  make  to  the  State  Commission  grants  and  loans  of  such 
sums of money as that Government may consider necessary. 

103.  Establishment  of  Fund  by  State  Government.–(1)  There  shall  be  constituted  a  Fund  to  be 

called the State Electricity Regulatory Commission fund and there shall be credited thereto– 

(a)  any  grants  and  loans  made  to  the  State  Commission  by  the  State  Government  under       

section 102; 

(b) all fees received by the State Commission under this Act; 

(c) all sums received by the State Commission from such other sources as may be decided upon 

by the State Government. 

(2) The Fund shall be applied for meeting– 

(a)  the  salary,  allowances and  other remuneration  of Chairperson,  Members,  Secretary,  officers 

and other employees of the State Commission; 

(b) the expenses of the State Commission in discharge of its functions under section 86; 

(c) the expenses on objects and for purposes authorised by this Act. 

(3) The State Government may, in consultation with the Comptroller and Auditor-General of India, 
prescribe the manner of applying the Fund for meeting the expenses specified in clause (b) or clause (c) of 
sub-section (2). 

104.  Accounts  and  audit  of  State  Commission.–(1)  The  State  Commission  shall  maintain  proper 
accounts  and  other  relevant  records  and  prepare  annual  statement  of  accounts  in  such  form  as  may  be 
prescribed by the State Government in consultation with the Comptroller and Auditor-General of India. 

53 

 
(2) The Accounts of the State Commission shall be audited by the Comptroller and Auditor-General 
of  India  at such intervals  as  may  be  specified  by  him  and  any  expenditure  incurred in  connection  with 
such audit shall be payable by the State Commission to the Comptroller and Auditor-General of India. 

(3)  The  Comptroller  and  Auditor-General  of  India  and  any  person  appointed  by  him  in  connection 
with  the  audit  of  the  accounts  of  the  State  Commission  under  this  Act  shall  have  the  same  rights  and 
privileges and authority in connection with such audit as the Comptroller and Auditor-General of India 
generally has in connection with the audit of Government accounts and, in particular, shall have the right 
to demand the production of books, accounts, connected vouchers and other documents and papers and to 
inspect any of the offices of the State Commission. 

(4)  The  accounts  of  the  State  Commission,  as  certified  by  the  Comptroller  and  Auditor-General  of 
India or any other person appointed by him in this behalf, together with the audit report thereon shall be 
forwarded annually to the State Government and that Government shall cause the same to be laid, as soon 
as may be after it is received, before the State Legislature. 

105. Annual report of State Commission.–(1) The State Commission shall prepare once every year 
in such form and at such time as may be prescribed, an annual report giving a summary of its activities 
during the previous year and copies of the report shall be forwarded to the State Government. 

(2)  A  copy  of  the  report  received  under  sub-section  (1)  shall  be  laid,  as  soon  as  may  be  after  it  is 

received, before the State Legislature. 

106. Budget of Appropriate Commission.–The Appropriate Commission shall prepare, in such form 
and  at  such  time  in  each  financial  year  as  may  be  prescribed,  its  budget  for  the  next  financial  year, 
showing  the  estimated  receipts  and  expenditure  of  that  Commission  and  forward  the  same  to  the 
Appropriate Government. 

107.  Directions  by  Central  Government.–(1)  In  the  discharge  of  its  functions,  the  Central 
Commission  shall  be  guided  by  such  directions  in  matters  of  policy  involving  public  interest  as  the 
Central Government may give to it in writing. 

(2)  If  any  question  arises  as  to  whether  any  such  direction  relates  to  a  matter  of  policy  involving 

public interest, the decision of the Central Government thereon shall be final. 

108. Directions by State Government.–(1) In the discharge of its functions, the State Commission 
shall be guided by such directions in matters of policy involving public interest as the State Government 
may give to it in writing. 

(2)  If  any  question  arises  as  to  whether  any  such  direction  relates  to  a  matter  of  policy  involving 

public interest, the decision of the State Government thereon shall be final. 

 109. Directions to Joint Commission.–Notwithstanding anything contained in this Act, where any 

Joint Commission is established under section 83– 

(a)  the  Government  of  the  State,  for  which  the  Joint  Commission  is  established,  shall  be 
competent to give any direction under this Act only in cases where such direction relates to matter 
within the exclusive territorial jurisdiction of the State; 

(b) the Central Government alone shall be competent to give any direction under this Act where 
such direction relates to a matter within the territorial jurisdiction of two or more States or pertaining 
to a Union territory if the participating Governments fail to reach an agreement or the participating 
States or majority of them request the Central Government to issue such directions. 

54 

 
 
 
PART XI 

APPELLATE TRIBUNAL FOR ELECTRICITY 

110. Establishment of Appellate Tribunal.–The Central Government shall, by notification, establish 
an Appellate Tribunal to be known as the Appellate Tribunal for Electricity to hear appeals against the 
orders of the adjudicating officer or the Appropriate Commission 1[under this Act or any other law for the 
time being in force]. 

111. Appeal to Appellate Tribunal.–(1) Any person aggrieved by an order made by an adjudicating 
officer under this Act (except under section 127) or an order made by the Appropriate Commission under 
this Act may prefer an appeal to the Appellate Tribunal for Electricity: 

Provided that any person appealing against the order of the adjudicating officer levying any penalty 

shall, while filing the appeal, deposit the amount of such penalty: 

Provided further that where in any particular case, the Appellate Tribunal is of the opinion that the 
deposit  of  such  penalty  would cause  undue hardship to  such  person, it  may  dispense  with  such  deposit 
subject to such conditions as it may deem fit to impose so as to safeguard the realisation of penalty. 

(2) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date 
on which a copy of the order made by the adjudicating officer or the Appropriate Commission is received 
by the aggrieved person and it shall be in such form, verified in such manner and be accompanied by such 
fee as may be prescribed: 

Provided  that  the  Appellate  Tribunal  may  entertain  an  appeal  after the  expiry  of  the  said  period  of 

forty-five days if it is satisfied that there was sufficient cause for not filing it within that period. 

(3) On receipt of an appeal under sub-section (1), the Appellate Tribunal may, after giving the parties 
to  the  appeal  an  opportunity  of  being  heard,  pass  such  orders  thereon  as  it  thinks  fit,  confirming, 
modifying or setting aside the order appealed against. 

(4) The Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and 

to the concerned adjudicating officer or the Appropriate Commission, as the case may be. 

(5) The appeal filed before the Appellate Tribunal under sub-section (1) shall be dealt with by it as 
expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within one 
hundred and eighty days from the date of receipt of the appeal: 

Provided that where any appeal could not be disposed of within the said period of one hundred and 
eighty  days,  the  Appellate  Tribunal  shall  record  its  reasons  in  writing  for  not  disposing  of  the  appeal 
within the said period. 

(6) The Appellate Tribunal may, for the purpose of examining the legality, propriety or correctness of 
any  order  made  by  the  adjudicating  officer  or  the  Appropriate  Commission  under  this  Act,  as  the  case 
may  be,  in  relation  to  any  proceeding,  on  its  own  motion  or  otherwise,  call  for  the  records  of  such 
proceedings and make such order in the case as it thinks fit. 

112. Composition of Appellate Tribunal.–(1) The Appellate Tribunal shall consist of a Chairperson 

and three other Members. 

(2) Subject to the provisions of this Act,– 

(a) the jurisdiction of the Appellate Tribunal may be exercised by Benches thereof; 

(b) a Bench may be constituted by the Chairperson of the Appellate Tribunal with two or more 

Members of the Appellate Tribunal as the Chairperson of the Appellate Tribunal may deem fit: 

Provided  that  every  Bench  constituted  under  this  clause  shall  include  at  least  one  Judicial 

Member and one Technical Member; 

1. Subs. by Act 28 of 2010, s. 16 and the Schedule, for “under this Act” (w.e.f. 24-8-2010). 

55 

 
                                                           
(c) the Benches of the Appellate Tribunal shall ordinarily sit at Delhi and such other places as the 

Central Government may, in consultation with the Chairperson of the Appellate Tribunal, notify; 

(d) the Central Government shall notify the areas in relation to which each Bench of the Appellate 

Tribunal may exercise jurisdiction. 

(3) Notwithstanding anything contained in sub-section (2), the Chairperson of the Appellate Tribunal 

may transfer a Member of the Appellate Tribunal from one Bench to another Bench. 

Explanation.–For the purposes of this Chapter,– 

(i)  “Judicial  Member”  means  a  Member  of  the  Appellate  Tribunal  appointed  as  such  under           

sub-clause  (i)  of  caluse  (b)  of  sub-section  (1)  of  section  113,  and  includes  the  Chairperson  of  the 
Appellate Tribunal; 

(ii)  “Technical  Member”  means  a  Member  of  the  Appellate  Tribunal  appointed  as  such  under 

sub-clause (ii) or sub-clause (iii) of clause (b) of sub-section (1) of section 113. 

113. Qualifications for appointment of Chairperson and Member of Appellate Tribunal.–(1) A 
person shall not be qualified for appointment as the Chairperson of the Appellate Tribunal or a Member 
of the Appellate Tribunal unless he– 

(a)  in  the  case  of  the  Chairperson  of  the  Appellate  Tribunal,  is,  or  has  been,  a  judge  of  the 

Supreme Court or the Chief Justice of a High Court; and 

(b) in the case of a Member of the Appellate Tribunal,– 

(i) is, or has been, or is qualified to be, a Judge of a High Court; or 

(ii)  is,  or  has  been,  a  Secretary  for  at  least  one  year  in  the  Ministry  or  Department  of  the 

Central Government dealing with economic affairs or matters or infrastructure; or 

(iii)  is,  or  has  been,  a  person  of  ability  and  standing,  having  adequate  knowledge  or 
experience  in  dealing  with  the  matters  relating  to  electricity  generation,  transmission  and 
distribution and regulation or economics, commerce, law or management. 

(2)  The  Chairperson  of  the  Appellate  Tribunal  shall  be  appointed  by  the  Central  Government  after 

consultation with the Chief Justice of India. 

(3)  The  Members  of  the  Appellate  Tribunal  shall  be  appointed  by  the  Central  Government  on  the 

recommendation of the Selection Committee referred to in section 78. 

(4) Before appointing any person for appointment as Chairperson or other Member of the Appellate 
Tribunal, the Central Government shall satisfy itself that such person does not have any financial or other 
interest which is likely to affect prejudicially his functions as such Chairperson or Member. 

114.  Term  of  office.–The  Chairperson  of  the  Appellate  Tribunal  or  a  Member  of  the  Appellate 
Tribunal  shall  hold  office as  such  for  a  term  of  three  years  from  the  date  on  which  he  enters  upon  his 
office: 

Provided  that  such  Chairperson  or  other  Member  shall  be  eligible  for  re-appointment  for  a  second 

term of three years: 

Provided further that no Chairperson of the Appellate Tribunal or Member of the Appellate Tribunal 

shall hold office as such after he has attained,– 

(a) in the case of the Chairperson of the Appellate Tribunal, the age of seventy years; 

(b) in the case of a Member of the Appellate Tribunal, the age of sixty-five years. 

56 

 
115. Terms and conditions of service.–The salary  and allowances payable to, and the other terms 
and  conditions  of  service  of,  the  Chairperson  of  the  Appellate  Tribunal  and  Members  of  the  Appellate 
Tribunal shall be such as may be prescribed by the Central Government: 

Provided that neither the salary and allowances nor the other terms and conditions of service of the 
Chairperson  of  the  Appellate  Tribunal  or  a  Member  of  the  Appellate  Tribunal  shall  be  varied  to  his 
disadvantage after appointment. 

116. Vacancies.–If, for reason other than temporary absence, any vacancy occurs in the office of the 
Chairperson of the Appellate Tribunal or a Member of the Appellate Tribunal, the Central Government 
shall  appoint  another  person  in  accordance  with  the  provisions  of  this  Act  to  fill  the  vacancy  and  the 
proceedings may be continued before the Appellate Tribunal from the stage at which the vacancy is filled. 

117. Resignation and removal.–(1) The Chairperson of the Appellate Tribunal or a Member of the 
Appellate Tribunal may, by notice in writing under his hand addressed to the Central Government, resign 
his office: 

Provided that the Chairperson of the Appellate Tribunal or a Member of the Appellate Tribunal shall, 
unless he is permitted by the Central Government to relinquish his office sooner, continue to hold office 
until the expiry of three months from the date of receipt of such notice or until a person duly appointed as 
his successor enters upon his office or until the expiry of term of office, whichever is the earliest. 

(2) The  Chairperson  of the  Appellate Tribunal  or  a Member  of the  Appellate Tribunal shall  not  be 
removed  from  his  office  except  by  an  order  by  the  Central  Government  on  the  ground  of  proved 
misbehaviour  or  incapacity  after  an  inquiry  made  by  a  judge  of  the  Supreme  Court,  as  the  Central 
Government  may  appoint  for  this  purpose  in  which  the  Chairperson  or  a  Member  of  the  Appellate 
Tribunal concerned has been informed of the charges against him and given a reasonable opportunity of 
being heard in respect of such charges. 

1[117A.  Qualifications,  terms  and  conditions  of  service  of  Chairperson  and  Member.–  
Notwithstanding anything contained in this Act, the qualifications, appointment, term of office, salaries 
and allowances, resignation, removal and the other term and conditions of service of the Chairperson and 
other Members of the Appellate Tribunal appointed after the commencement of  2[the Tribunals Reforms 
Act, 2021, shall be governed by the provisions of Chapter II of the said Act]: 

Provided  that  the  Chairperson  and  Member  appointed  before  the  commencement  of  Part  XIV  of 
Chapter VI of the Finance Act, 2017 (7 of 2017), shall continue to be governed by the provisions of this 
Act, and the rules made thereunder as if the provisions of section 184 of the Finance Act, 2017 had not 
come into force.] 

118. Member to act as Chairperson in certain circumstances.–(1) In the event of the occurrence of 
any vacancy in the office of the Chairperson of the Appellate Tribunal by reason of his death, resignation 
or  otherwise,  the  senior-most  Member  of  the  Appellate  Tribunal  shall  act  as  the  Chairperson  of  the 
Appellate  Tribunal  until  the  date  on  which  a  new  Chairperson,  appointed  in  accordance  with  the 
provisions of this Act to fill such vacancy, enters upon his office. 

(2)  When  the  Chairperson  of  the  Appellate  Tribunal  is  unable  to  discharge  his  functions  owing  to 
absence, illness or any other cause, the senior-most Member of the Appellate Tribunal shall discharge the 
functions  of  the  Chairperson  of  the  Appellate  Tribunal  until  the  date  on  which  the  Chairperson  of  the 
Appellate Tribunal resumes his duties. 

1. Ins. by Act 7 of 2017, s. 180 (w.e.f. 26-5-2017). 
2. Subs. by Act 33 of 2021, s. 25, for “Part XIV of Chapter VI of the Finance Act, 2017 (7 of 2017), shall be governed by the 

provisions of the section 184 of that Act” (w.e.f. 4-4-2021). 

57 

 
                                                           
119.  Officers  and  other  employees  of  Appellate  Tribunal.–(1)  The  Central  Government  shall 

provide the Appellate Tribunal with such officers and other employees as it may deem fit. 

(2) The officers and other employees of the Appellate Tribunal shall discharge their functions under 

the general superintendence of the Chairperson of the Appellate Tribunal. 

(3) The salaries  and  allowances  and  other  terms  and  conditions  of  service of the  officers and  other 

employees of the Appellate Tribunal shall be such as may be prescribed by the Central Government. 

120. Procedure and powers of Appellate Tribunal.–(1) The Appellate Tribunal shall not be bound 
by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the 
principles of natural justice and, subject to the other provisions of this Act, the Appellate Tribunal shall 
have powers to regulate its own procedure. 

(2) The Appellate Tribunal shall have, for the purposes of discharging its functions under this Act, the 
same  powers  as  are  vested  in  a  civil court  under the Code  of  Civil  Procedure, 1908 (5  of 1908),  while 
trying a suit, in respect of the following matters, namely:– 

(a) summoning and enforcing the attendance of any person and examining him on oath; 
(b) requiring the discovery and production of documents; 
(c) receiving evidence on affidavits; 
(d)  subject  to  the  provisions  of  sections  123  and  124  of  the  Indian  Evidence  Act,  1872                 

(1 of 1872), requisitioning any public record or document or copy of such record or document from 
any office; 

(e) issuing commissions for the examination of witnesses or documents; 
(f) reviewing its decisions; 
(g) dismissing a representation of default or deciding it ex parte; 
(h) setting aside any order of dismissal or any representation for default or any order passed by it 

ex parte; 

(i) any other matter which may be prescribed by the Central Government. 

(3)  An  order  made  by  the  Appellate  Tribunal  under  this  Act  shall  be  executable  by  the  Appellate 
Tribunal as a decree of civil court and, for this purpose, the Appellate Tribunal shall have all the powers 
of a civil court. 

(4) Notwithstanding anything contained in sub-section (3), the Appellate Tribunal may transmit any 
order made by it to a civil court having local jurisdiction and such civil court shall execute the order as if 
it were a decree made by that court. 

(5) All proceedings before the Appellate Tribunal shall be deemed to be judicial proceedings within 
the meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860) and the Appellate Tribunal 
shall  be  deemed  to  be  a  civil  court  for  the  purposes  of  sections  345  and  346  of  the  Code  of  Criminal 
Procedure, 1973 (2 of 1974). 

1[121.  Power  of  Appellate  Tribunal.–The  Appellate  Tribunal  may,  after  hearing  the  Appropriate 
Commission  or  other  interested  party,  if  any,  from  time  to  time,  issue  such  orders,  instructions  or 
directions  as  it  may  deem  fit,  to  any  Appropriate  Commission  for  the  performance  of  its  statutory 
functions under this Act.] 

122. Distribution of business amongst Benches and transfer of cases from one Bench to another 
Bench.–(1) Where Benches are constituted, the Chairperson of the Appellate Tribunal may, from time to 
time,  by  notification,  make  provisions  as  to  the  distribution  of  the  business  of  the  Appellate  Tribunal 
amongst the Benches and also provide for the matters which may be dealt with by each Bench. 

1. Subs. by Act 57 of 2003, s. 4, for section 121 (w.e.f. 27-1-2004). 

58 

 
                                                           
(2) On the application of any of the parties and after notice to the parties, and after hearing such of 
them  as  he  may  desire  to  be  heard,  or  on  his  own  motion  without  such  notice,  the  Chairperson  of  the 
Appellate Tribunal may transfer any case pending before one Bench, for disposal, to any other Bench. 

123. Decision to be by majority.–If the Members of the Appellate Tribunal of a Bench consisting of 
two Members differ in opinion on any point, they shall state the point or points on which they differ, and 
make a reference to the Chairperson of the Appellate Tribunal who shall either hear the point or points 
himself or refer the case for hearing on such point or points by one or more of the other Members of the 
Appellate Tribunal and such point or points shall be decided according to the opinion of the majority of 
the Members of the Appellate Tribunal who have heard the case, including those who first heard it. 

124. Right of appellant to take assistance of legal practitioner and of Appropriate Commission 
to appoint presenting officers.–(1) A person preferring an appeal to the Appellate Tribunal under this 
Act may either appear in person or take the assistance of a legal practitioner of his choice to present his 
case before the Appellate Tribunal, as the case may be. 

(2) The Appropriate Commission may authorise one or more legal practitioners or any of its officers 
to  act  as  presenting  officers  and  every  person  so  authorised  may  present  the  case  with  respect  to  any 
appeal before the Appellate Tribunal, as the case may be. 

125.  Appeal  to  Supreme  Court.–Any  person  aggrieved  by  any  decision  or  order  of  the  Appellate 
Tribunal, may, file an appeal to the Supreme Court within sixty days from the date of communication of 
the decision or order of the Appellate Tribunal, to him, on any one or more of the grounds specified in 
section 100 of the Code of Civil Procedure, 1908 (5 of 1908): 

Provided that the Supreme Court may, if it is satisfied that the appellant was prevented by sufficient 
cause  from  filing  the  appeal  within  the  said  period,  allow  it  to  be  filed  within  a  further  period  not 
exceeding sixty days. 

PART XII 
INVESTIGATION AND ENFORCEMENT 

126.  Assessment.–(1)  If  on  an  inspection  of  any  place  or  premises  or  after  inspection  of  the 
equipments,  gadgets,  machines,  devices  found  connected  or  used,  or  after  inspection  of  records 
maintained by any person, the assessing officer comes to the conclusion that such person is indulging in 
unauthorised  use  of  electricity,  he  shall  provisionally  assess  to  the  best  of  his  judgment  the  electricity 
charges payable by such person or by any other person benefited by such use. 

(2) The order of provisional assessment shall be served upon the person in occupation or possession 

or in charge of the place or premises in such manner as may be prescribed. 

1[(3) The  person,  on  whom  an  order  has been  served under  sub-section  (2),  shall  be  entitled to file 
objections,  if  any,  against  the  provisional  assessment  before  the  assessing  officer,  who  shall,  after 
affording  a  reasonable  opportunity  of  hearing  to  such  person,  pass  a  final  order  of  assessment  within 
thirty  days  from  the  date  of  service  of  such  order  of  provisional  assessment,  of  the  electricity  charges 
payable by such person.] 

(4)  Any  person  served  with  the  order  of  provisional  assessment  may,  accept  such  assessment  and 
deposit the assessed amount with the licensee within seven days of service of such provisional assessment 
order upon him: 

* 

2* 
3[(5) If the assessing officer reaches to the conclusion that unauthorised use of electricity has taken 
place, the assessment shall be made for the entire period during which such unauthorised use of electricity 
has taken place and if, however, the period during which such unauthorised use of electricity has taken 

* 

* 

* 

1. Subs. by Act 26 of 2007, s. 11, for sub-section (3) (w.e.f. 15-6-2007). 
2. The proviso omitted by s. 11, ibid. (w.e.f. 15-6-2007). 
3. Subs. by s. 11, ibid., for sub-section (5)  (w.e.f. 15-6-2007). 

59 

 
 
 
 
 
 
 
 
 
                                                           
 
 
 
place  cannot  be  ascertained,  such  period  shall  be  limited  to  a  period  of  twelve  months  immediately 
preceding the date of inspection.] 

(6) The assessment under this section shall be made at a rate equal to 1[twice] the tariff applicable for 

the relevant category of services specified in sub-section (5). 

Explanation.–For the purposes of this section,– 

(a) “assessing officer” means an officer of a State Government or Board or licensee, as the case 

may be, designated as such by the State Government; 

(b) “unauthorised use of electricity” means the usage of electricity– 

(i) by any artificial means; or 

(ii) by a means not authorised by the concerned person or authority or licensee; or 

(iii) through a tampered meter; or 

2[(iv) for the purpose other than for which the usage of electricity was authorised; or 

(v)  for  the  premises  or  areas  other  than  those  for  which  the  supply  of  electricity  was 

authorised.] 

127.  Appeal  to  Appellate  Authority.–(1)  Any  person  aggrieved  by  the  final  order  made  under 
section  126  may,  within  thirty  days  of  the  said  order,  prefer  an  appeal  in  such  form,  verified  in  such 
manner and be accompanied by such fee as may be specified by the State Commission, to an appellate 
authority as may be prescribed. 

(2)  No  appeal  against  an  order  of  assessment  under  sub-section  (1)  shall  be  entertained  unless  an 
amount  equal  to  3[half  of  the  assessed  amount]  is  deposited  in  cash  or  by  way  of  bank  draft  with  the 
licensee and documentary evidence of such deposit has been enclosed along with the appeal. 

(3) The appellate authority referred to in sub-section (1) shall dispose of the appeal after hearing the 

parties and pass appropriate order and send copy of the order to the assessing officer and the appellant. 

(4)  The  order  of  the  appellate  authority  referred  to  in  sub-section  (1)  passed  under  sub-section  (3) 

shall be final. 

(5) No appeal shall lie to the appellate authority referred to in sub-section (1) against the final order 

made with the consent of the parties. 

(6) When a  person  defaults  in  making  payment  of  assessed  amount,  he,  in addition to the assessed 
amount shall be liable to pay, on the expiry of thirty days from the date of order of assessment, an amount 
of interest at the rate of sixteen per cent. per annum compounded every six months. 

128. Investigation of certain matters.–(1) The Appropriate Commission may, on being satisfied that 
a  licensee  has  failed  to  comply  with  any  of  the  conditions  of  licence  or  a  generating  company  or  a 
licensee  has  failed  to  comply  with  any  of  the  provisions  of  this  Act  or  the  rules  or  regulations  made 
thereunder,  at  any  time,  by  order  in  writing,  direct  any  person  (hereafter  in  this  section  referred  to  as 
“Investigating Authority”) specified in the order to investigate the affairs of any generating company or 
licensee and to report to that Commission on any investigation made by such Investigating Authority: 

1. Subs. by Act 26 of 2007,  s. 11, for “one-and-half times” (w.e.f. 15-6-2007). 
2. Subs. by s. 11, ibid., for sub-clause  (iv) (w.e.f. 15-6-2007). 
3. Subs. by s. 12, ibid., for  “one-third of the assessed amount” (w.e.f. 15-6-2007). 

60 

 
                                                           
 
Provided that the Investigating Authority may, wherever necessary, employ any auditor or any other 

person for the purpose of assisting him in any investigation under this section. 

(2)  Notwithstanding  anything  to  the  contrary  contained  in section  235  of  the  Companies  Act,  1956   

(1  of  1956),  the  Investigating  Authority  may,  at  any  time,  and  shall,  on  being  directed  so to  do  by  the 
Appropriate Commission, cause an inspection to be made, by one or more of his officers, of any licensee 
or  generating  company  and  his  books  of  account;  and  the  Investigating  Authority  shall  supply  to  the 
licensee or generating company, as the case may be, a copy of his report on such inspection. 

(3)  It  shall  be  the  duty  of  every  manager,  managing  director  or  other  officer  of  the  licensee  or 
generating company, as the case may be, to produce before the Investigating Authority directed to make 
the  investigation  under  sub-section  (1),  or  inspection  under  sub-section  (2),  all  such  books  of  account, 
registers  and  other  documents  in  his  custody  or  power  and  to  furnish  him  with  any  statement  and 
information relating to the affairs of the licensee or generating company, as the case may be, as the said 
Investigating  Authority  may  require  of  him  within  such  time  as  the  said  Investigating  Authority  may 
specify. 

(4)  Any  Investigating  Authority,  directed  to  make  an  investigation  under  sub-section  (1),  or 
inspection under sub-section (2), may examine on oath any manager, managing director or other officer of 
the licensee or generating company, as the case may  be, in relation to his business and may administer 
oaths accordingly. 

 (5)  The  Investigating  Authority,  shall,  if  it  has  been  directed  by  the  Appropriate  Commission  to 
cause an inspection to be made, and may, in any other case, report to the Appropriate Commission on any 
inspection made under this section. 

(6)  On  receipt  of  any  report  under  sub-section  (1)  or  sub-section  (5),  the  Appropriate  Commission 
may, after giving such opportunity to the licensee or generating company, as the case may be, to make a 
representation  in  connection  with  the  report  as  in  the  opinion  of  the  Appropriate  Commission  seems 
reasonable, by order in writing– 

(a) require  the licensee  or the  generating  company  to  take  such  action  in  respect  of any  matter 

arising out of the report as the Appropriate Commission may think fit; or  

(b) cancel the licence; or  

(c) direct the generating company to cease to carry on the business of generation of electricity. 
(7) The Appropriate Commission may, after giving reasonable notice to the licensee or the generating 
company,  as  the  case  may  be,  publish  the  report  submitted  by  the  Investigating  Authority  under           
sub-section (5) or such portion thereof as may appear to it to be necessary.  

(8)  The  Appropriate  Commission  may  specify  the  minimum  information  to  be  maintained  by  the 
licensee  or  the  generating  company  in  their  books,  the  manner  in  which  such  information  shall  be 
maintained, the checks and other verifications to be adopted by licensee or the generating company in that 
connection  and  all  other  matters  incidental  thereto  as  are,  in  its  opinion,  necessary  to  enable  the 
Investigating Authority to discharge satisfactorily its functions under this section. 

Explanation.–For the purposes of this section, the expression “licensee or the generating company” 

shall include in the case of a licensee incorporated in India– 

(a)  all  its  subsidiaries  formed  for  the  purpose  of  carrying  on  the  business  of  generation  or 

transmission or distribution or trading of electricity exclusively outside India; and 

(b) all its branches whether situated in India or outside India. 

(9) All expenses of, and incidental to, any investigation made under this section shall be defrayed by 
the licensee  or  the  generating  company,  as  the  case may  be,  and  shall  have  priority  over  the debts  due 
from the licensee or the generating company and shall be recoverable as an arrear of land revenue. 

61 

 
129.  Orders  for  securing  compliance.–(1)  Where  the  Appropriate  Commission,  on  the  basis  of 
material in its possession, is satisfied that a licensee is contravening, or is likely to contravene, any of the 
conditions mentioned in his licence or conditions for grant of exemption or the licensee or the generating 
company has contravened or is likely to contravene any of the provisions of this Act, it shall, by an order, 
give such directions as may be necessary for the purpose of securing compliance with that condition or 
provision. 

(2) While giving direction under sub-section (1), the Appropriate Commission shall have due regard 

to the extent to which any person is likely to sustain loss or damage due to such contravention. 

130.  Procedure 

for 

issuing  directions  by  Appropriate  Commission.–The  Appropriate 

Commission, before issuing any direction under section 129, shall– 

(a)  serve  notice  in  the  manner  as  may  be  specified  to  the  concerned  licensee  or  the  generating 

company; 

(b) publish the notice in the manner as may be specified for the purpose of bringing the matters to 

the attention of persons, likely to be affected, or affected; 

(c) consider suggestions and objections from the concerned licensee or generating company and 

the persons, likely to be affected, or affected. 

PART XIII 
REORGANISATION OF BOARD 

131. Vesting of property of Board in State Government.–(1) With effect from the date on which a 
transfer scheme, prepared by the State Government to give effect to the objects and purposes of this Act, 
is  published  or  such  further  date  as  may  be  stipulated  by  the  State  Government  (hereafter  in  this  Part 
referred  to  as  the  effective  date),  any  property,  interest  in  property,  rights  and  liabilities  which 
immediately before the effective date belonged to the State Electricity Board (hereinafter referred to as 
the  Board)  shall  vest  in  the  State  Government  on  such  terms  as  may  be  agreed  between  the  State 
Government and the Board. 

(2)  Any  property,  interest  in  property,  rights  and  liabilities  vested  in  the  State  Government  under   

sub-section (1) shall be re-vested by the State Government in a Government company or in a company or 
companies, in accordance with the transfer scheme so published along with such other property, interest 
in property, rights and liabilities of the State Government as may be stipulated in such scheme, on such 
terms and conditions as may be agreed between the State Government and such company or companies 
being State Transmission Utility or generating company or transmission licensee or distribution licensee, 
as the case may be: 

Provided that the transfer value of any assets transferred hereunder shall be determined, as far as may 
be, based on the revenue potential of such assets at such terms and conditions as may be agreed between 
the State Government and the State Transmission Utility or generating company or transmission licensee 
or distribution licensee, as the case may be. 

(3) Notwithstanding anything contained in this section, where,– 

(a)  the  transfer  scheme  involves  the  transfer  of  any  property  or  rights  to  any  person  or 
undertaking not wholly owned by the State Government, the scheme shall give effect to the transfer 
only for fair value to be paid by the transferee to the State Government; 

(b)  a  transaction  of  any  description  is  effected  in  pursuance  of  a  transfer    scheme,  it  shall  be 
binding  on  all  persons  including  third  parties  and  even  if  such  persons  or  third  parties  have  not 
consented to it. 

(4) The State Government may, after consulting the Government company or company or companies 
being State Transmission Utility or generating company or transmission licensee or distribution licensee, 
referred to in sub-section (2) (hereinafter referred to as the transferor), require such transferor to draw up 

62 

 
a transfer scheme to vest in a transferee being any other generating company or transmission licensee or 
distribution licensee, the property, interest in property, rights and liabilities which have been vested in the 
transferor under this section, and publish such scheme as statutory transfer scheme under this Act. 

(5) A transfer scheme under this section may– 

(a)  provide  for  the  formation  of  subsidiaries,  joint  venture  companies  or  other  schemes  of 
division, amalgamation, merger, reconstruction or arrangements which shall promote the profitability 
and viability of the resulting entity, ensure economic efficiency, encourage competition and protect 
consumer interests; 

(b) define the property, interest in property, rights and liabilities to be allocated– 

(i) by specifying or describing the property, rights and liabilities in question; or 

(ii) by referring to all the property, interest in property, rights and liabilities comprised in a 

described part of the transferor's undertaking; or 

(iii) partly in one way and partly in the other; 

(c) provide that any rights or liabilities stipulated or described in the scheme shall be enforceable 

by or against the transferor or the transferee; 

(d) impose on the transferor an obligation to enter into such written agreements with or execute 
such  other  instruments  in  favour  of  any  other  subsequent  transferee  as  may  be  stipulated  in  the 
scheme; 

(e) mention the functions and duties of the transferee; 

(f)  make  such  supplemental,  incidental  and consequential  provisions  as the transferor  considers 

appropriate including provision stipulating the order as taking effect; and 

(g) provide that the transfer shall be provisional for a stipulated period. 

(6) All debts and obligations incurred, all contracts entered into and all matters and things engaged to 
be done by the Board, with the Board or for the Board, or the State Transmission Utility or generating 
company  or  transmission  licensee  or  distribution  licensee,  before  a  transfer  scheme  becomes  effective 
shall, to the  extent  specified  in  the  relevant  transfer scheme,  be  deemed  to  have  been  incurred,  entered 
into or done by the Board, with the Board or for the State Government or the transferee and all suits or 
other  legal  proceedings  instituted  by  or  against  the  Board  or  transferor,  as  the  case  may  be,  may  be 
continued or instituted by or against the State Government or concerned transferee, as the case may be. 

(7)  The  Board  shall  cease  to  be  charged  with  and  shall  not  perform  the  functions  and  duties  with 

regard to transfers made on and after the effective date. 

Explanation.–For the purpose of this Part,– 

(a)  “Government  company”  means  a  Government  Company  formed  and  registered  under  the 

Companies Act, 1956 (1 of 1956). 

(b)  “company”  means  a  company  to  be  formed  and  registered  under  the  Companies  Act,  1956    

(1  of  1956)  to  undertake  generation  or  transmission  or  distribution  in  accordance  with  the  scheme 
under this Part. 

132.  Use  of  proceeds  of  sale  or  transfer  of  Board,  etc.–In  the  event  that  a  Board  or  any  utility 
owned or controlled by the Appropriate Government is sold or transferred in any manner to a person who 
is not owned or controlled by the Appropriate Government, the proceeds from such sale or transfer shall 
be utilised in priority to all other dues in the following order, namely:– 

(a) dues (including retirement benefits due) to the officers and employees of such Board or utility, 

who have been affected by the aforesaid sale or transfer; 

63 

 
(b) payment of debt or other liabilities of the transferor as may be required by the existing loan 

covenants. 

133. Provisions relating to officers and employees.–(1) The State Government may, by a transfer 
scheme,  provide  for  the  transfer  of  the  officers  and  employees  to  the  transferee  on  the  vesting  of 
properties, rights and liabilities in such transferee as provided under section 131. 

 (2) Upon such transfer under the transfer scheme, the personnel shall hold office or service under the 

transferee on such terms and conditions as may be determined in accordance with the transfer scheme: 

Provided that such terms and conditions on the transfer shall not in any way be less favourable than 
those  which  would  have  been  applicable  to  them  if  there  had  been  no  such  transfer  under  the  transfer 
scheme: 

Provided further that the transfer can be provisional for a stipulated period. 

Explanation.–For the purposes of this section and the transfer scheme, the expression  “officers and 
employees” shall mean all officers and employees who on the date specified in the scheme are the officers 
and employees of the Board or transferor, as the case may be. 

134.  Payment  of  compensation  or  damages  on  transfer.–Notwithstanding  anything  contained  in 
the Industrial Disputes Act, 1947 (14 of 1947) or any other law for the time being in force and except for 
the provisions made in this Act, the transfer of the employment of the officers and employees referred to 
in  sub-section  (1)  of  section  133  shall  not  entitle  such  officers  and  employees  to  any  compensation  or 
damages under this Act, or any other Central or State law, save as provided in the transfer scheme.  

135. Theft of Electricity.–1[(1) Whoever, dishonestly,–  

PART XIV 

OFFENCES AND PENALTIES 

(a) taps, makes or causes to be made any connection with overhead, underground or under water 

lines or cables, or service wires, or service facilities of a licensee or supplier, as the case may be; or 

(b)  tampers  a  meter,  installs  or  uses  a  tampered  meter,  current  reversing  transformer,  loop 
connection  or  any  other  device  or  method  which  interferes  with  accurate  or  proper  registration, 
calibration  or  metering  of  electric  current  or  otherwise  results  in  a  manner  whereby  electricity  is 
stolen or wasted; or 

(c) damages or destroys an electric meter, apparatus, equipment, or wire or causes or allows any 
of  them  to  be  so  damaged  or  destroyed  as  to  interfere  with  the  proper  or  accurate  metering  of 
electricity; or 

(d) uses electricity through a tampered meter; or  

(e) uses electricity for the purpose other than for which the usage of electricity was authorised,  

so as to abstract or consume or use electricity shall be punishable with imprisonment for a term which 
may extend to three years or with fine or with both: 

Provided that in a case where the load abstracted, consumed, or used or attempted abstraction or 

attempted consumption or attempted use– 

(i)  does  not  exceed  10  kilowatt,  the  fine  imposed  on  first  conviction  shall  not  be  less  than 
three times the financial gain on account of such theft of electricity and in the event of second or 
subsequent  conviction  the  fine  imposed  shall  not  be  less  than  six  times  the  financial  gain  on 
account of such theft of electricity; 

1. Subs. by Act 26 of 2007, s. 13, for sub-section (1) (w.e.f. 15-6-2007). 

64 

 
                                                           
 
(ii) exceeds 10 kilowatt, the fine imposed on first conviction shall not be less than three times 
the financial gain on account of such theft of electricity and in the event of second or subsequent 
conviction, the sentence shall be imprisonment for a term not less than six months, but which may 
extend to five years and with fine not less than six times the financial gain on account of such 
theft of electricity: 

Provided further that in the event of second and subsequent conviction of a person where the load 
abstracted,  consumed,  or  used  or  attempted  abstraction  or  attempted  consumption  or  attempted  use 
exceeds 10 kilowatt, such person shall also be debarred from getting any supply of electricity for a 
period  which  shall  not  be  less  than  three  months  but  may  extend  to  two  years  and  shall  also  be 
debarred from getting supply of electricity for that period from any other source or generating station: 

Provided also that if it is proved that any artificial means or means not authorised by the Board or 
licensee or supplier, as the case may be, exist for the abstraction, consumption or use of electricity by 
the consumer, it shall be presumed, until the contrary is proved, that any abstraction, consumption or 
use of electricity has been dishonestly caused by such consumer. 

(1A) Without prejudice to the provisions of this Act, the licensee or supplier, as the case may be, 

may, upon detection of such theft of electricity, immediately disconnect the supply of electricity: 

Provided that only such officer of the licensee or supplier, as authorised for the purpose by the 
Appropriate Commission or any other officer of the licensee or supplier, as the case may be, of the 
rank higher than the rank so authorised shall disconnect the supply line of electricity: 

Provided  further  that  such officer  of the licensee  or  supplier, as the  case  may  be,  shall lodge  a 
complaint in writing relating to the commission of such offence in police station having jurisdiction 
within twenty-four hours from the time of such disconnection: 

Provided  also  that  the  licensee  or  supplier,  as  the  case  may  be,  on  deposit  or  payment  of  the 
assessed amount  or electricity  charges  in accordance  with the  provisions  of  this  Act,  shall,  without 
prejudice to the obligation to lodge the complaint as referred to in the second proviso to this clause, 
restore the supply line of electricity within forty-eight hours of such deposit or payment.] 
(2) 1[Any officer of the licensee or supplier as the case may be, authorised] in this behalf by the State 

Government may– 

(a) enter, inspect, break open and search any place or premises in which he has reason to believe 

that electricity  2[has been or is being] used unauthorisedly; 

(b)  search,  seize  and  remove  all  such  devices,  instruments,  wires  and  any  other  facilitator  or 

article which 2[has been, or is being] used for unauthorised use of electricity; 

(c) examine or seize any books of account or documents which in his opinion shall be useful for 
or relevant to, any proceedings in respect of the offence under sub-section (1) and allow the person 
from whose custody such books of account or documents are seized to make copies thereof or take 
extracts therefrom in his presence. 

(3) The occupant of the place of search or any person on his behalf shall remain present during the 
search and a list of all things seized in the course of such search shall be prepared and delivered to such 
occupant or person who shall sign the list: 

Provided that no inspection, search and seizure of any domestic places or domestic premises shall be 
carried out between sunset and sunrise except in the presence of an adult male member occupying such 
premises. 

(4) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to search and seizure 

shall apply, as far as may be, to searches and seizure under this Act. 

1. Subs. by Act 26 of 2007, s. 13, for “Any officer authorised” (w.e.f. 15-6-2007). 
2. Subs. by Act 57 of 2003, s. 5, for “has been, is being, or is likely to be,” (w.e.f. 27-1-2004). 

65 

 
                                                           
136. Theft of electric lines and materials.–(1) Whoever, dishonestly– 

(a) cuts or removes or takes way or transfers any electric line, material or meter from a tower, 
pole,  any  other  installation  or  place  of  installation  or  any  other  place,  or  site  where  it  may  be 
rightfully  or  lawfully  stored,  deposited,  kept,  stocked,  situated  or  located,  including  during 
transportation, without the consent of the licensee or the owner, as the case may be, whether or not 
the act is done for profit or gain; or 

 (b)  stores,  possesses  or  otherwise  keeps  in  his  premises,  custody  or  control,  any  electric  line, 
material or meter without the consent of the owner, whether or not the act is committed for profit or 
gain; or 

(c) loads, carries, or moves from one place to another any electric line, material or meter without 

the consent of its owner, whether or not the act is done for profit or gain, 

is said to have committed an offence of theft of electric lines and materials, and shall be punishable with 
imprisonment for a term which may extend to three years or with fine or with both. 

(2) If a person, having been convicted of an offence punishable under sub-section (1) is again guilty 
of  an  offence  punishable  under  that  sub-section,  he  shall  be  punishable  for  the  second  or  subsequent 
offence for a term of imprisonment which shall not be less than six months but which may extend to five 
years and shall also be liable to fine which shall not be less than ten thousand rupees. 

137. Punishment for receiving stolen property.–Whoever, dishonestly receives any stolen electric 
line or material knowing or having reasons to believe the same to be stolen property, shall be punishable 
with imprisonment of either description for a term which may extend to three years or with fine or with 
both. 

138. Interference with meters or works of licensee.–(1) Whoever,– 

(a) unauthorisedly connects any meter, indicator or apparatus with any electric line through which 

electricity is supplied by a licensee or disconnects the same from any such electric line; or 

(b)  unauthorisedly  reconnects  any  meter,  indicator  or  apparatus  with  any  electric  line  or  other 
works being the property of a licensee when the said electric line or other works has or have been cut 
or disconnected; or 

(c) lays or causes to be laid, or connects up any works for the purpose of communicating with any 

other works belonging to a licensee; or 

(d)  maliciously  injures  any  meter,  indicator,  or  apparatus  belonging  to  a  licensee  or  wilfully  or 
fraudulently  alters  the  index  of  any  such  meter,  indicator  or  apparatus  or  prevents  any  such  meter, 
indicator or apparatus from duly registering,  

shall be  punishable  with imprisonment  for a term  which  may  extend to  three  years,  or  with  fine  which 
may extend to ten thousand rupees, or with both, and, in the case of a continuing offence, with a daily fine 
which  may  extend  to  five  hundred  rupees;  and  if  it  is  proved  that  any  means  exist  for  making  such 
connection  as  is  referred  to  in  clause  (a)  or  such  re-connection  as  is  referred  to  in  clause  (b),  or  such 
communication as is referred to in clause (c), for causing such alteration or prevention as is referred to in 
clause  (d),  and  that  the  meter,  indicator  or  apparatus  is  under  the  custody  or  control  of  the  consumer, 
whether it is his property or not, it shall be presumed, until the contrary is proved, that such connection, 
reconnection,  communication,  alteration,  prevention  or  improper  use,  as  the  case  may  be,  has  been 
knowingly and wilfully caused by such consumer. 

66 

 
1[139.  Negligently  breaking  or  damaging  works.–Whoever,  negligently  breaks,  injures,  throws 
down  or  damages  any  material  connected  with  the  supply  of  electricity,  shall  be  punishable  with  fine 
which may extend to ten thousand rupees. 

140.  Penalty  for  intentionally  injuring  works.–Whoever,  with  intent  to  cut  off  the  supply  of 
electricity,  cuts  or  injures,  or  attempts  to  cut  or  injure,  any  electric  supply  line  or  works,  shall  be 
punishable with fine which may extend to ten thousand rupees.] 

141.  Extinguishing  public  lamps.–Whoever,  maliciously  extinguishes  any  public  lamp  shall  be 

punishable with fine which may extend to two thousand rupees. 

142.  Punishment  for  non-compliance  of  directions  by  Appropriate  Commission.–In  case  any 
complaint is filed before the Appropriate Commission by any person or if that Commission is satisfied 
that  any  person  has  contravened  any  of  the  provisions  of  this  Act  or  the  rules  or  regulations  made 
thereunder,  or  any  direction  issued  by  the  Commission,  the  Appropriate  Commission  may  after  giving 
such person an opportunity of being heard in the matter, by order in writing, direct that, without prejudice 
to any other penalty to which he may be liable under this Act, such person shall pay, by way of penalty, 
which shall not exceed one lakh rupees for each contravention and in case of a continuing failure with an 
additional  penalty  which  may  extend  to  six  thousand  rupees  for  every  day  during  which  the  failure 
continues after contravention of the first such direction. 

143.  Power  to  adjudicate.–(1)  For  the  purpose  of  adjudging  under  this  Act,  the  Appropriate 
Commission shall appoint any of its Members to be an adjudicating officer for holding an inquiry in such 
manner  as  may  be  prescribed  by  the  Appropriate  Government,  after  giving  any  person  concerned  a 
reasonable opportunity of being heard for the purpose of imposing any penalty. 

(2) While holding an inquiry, the adjudicating officer shall have power to summon and enforce the 
attendance  of  any  person  acquainted  with  the  facts  and  circumstances  of  the  case  to  give  evidence  or 
produce any document which in the opinion of the adjudicating officer, may be useful for or relevant to 
the  subject-matter  of  the  inquiry,  and  if,  on  such  inquiry,  he  is  satisfied  that  the  person  has  failed  to 
comply with the provisions of section 29 or section 33 or section 43, he may impose such penalty as he 
thinks fit in accordance with the provisions of any of those sections. 

144. Factors to be taken into account by adjudicating officer.–While adjudicating the quantum of 
penalty under section 29 or section 33 or section 43, the adjudicating officer shall have due regard to the 
following factors, namely:– 

(a)  the  amount  of  disproportionate  gain  or  unfair  advantage,  wherever  quantifiable,  made  as  a 

result of the default; 

(b) the repetitive nature of the default. 

145. Civil court not to have jurisdiction.–No civil court shall have jurisdiction to entertain any suit 
or proceeding in respect of any matter which an assessing officer referred to in section 126 or an appellate 
authority referred to in section 127 or the adjudicating officer appointed under this Act is empowered by 
or under this Act to determine and no injunction shall be granted by any court or other authority in respect 
of any action taken or to be taken in pursuance of any power conferred by or under this Act. 

146. Punishment for non-compliance of orders or directions.–Whoever, fails to comply with any 
order or direction given under this Act, within such time as may be specified in the said order or direction 
or contravenes or attempts or abets the contravention of any of the provisions of this Act or any rules or 
regulations made thereunder, shall be punishable with imprisonment for a term which may extend to three 

1. Subs. by Act 57 of 2003, s. 6, for sections 139 and 140 (w.e.f. 27-1-2004). 

67 

 
                                                           
months or with fine which may extend to one lakh rupees, or with both in respect of each offence and in 
the  case  of  a  continuing  failure,  with  an  additional  fine  which  may  extend  to  five  thousand  rupees  for 
every day during which the failure continues after conviction of the first such offence: 

1[Provided that nothing contained in this section shall apply to the orders, instructions or directions 

issued under section 121.] 

147.  Penalties  not  to  affect  other  liabilities.–The  penalties  imposed  under  this  Act  shall  be  in 
addition to, and not in derogation of, any liability in respect of payment of compensation or, in the case of 
a licensee, the revocation of his licence which the offender may have incurred. 

148. Penalty where works belong to Government.–The provisions of this Act shall, so far as they 
are applicable, be deemed to apply also when the acts made punishable thereunder are committed in the 
case of electricity supplied by or of works belonging to the Appropriate Government. 

149.  Offences  by  companies.–(1)  Where  an  offence  under  this  Act  has  been  committed  by  a 
company, every person who at the time the offence was committed was in charge of and was responsible 
to the company for the conduct of the business of the company, as well as the company shall be deemed 
to  be  guilty  of  having  committed  the  offence  and  shall  be  liable  to  be  proceeded  against  and  punished 
accordingly: 

Provided  that  nothing  contained  in  this  sub-section  shall  render  any  such  person  liable  to  any 
punishment if he proves that the offence was committed without his knowledge or that he had exercised 
all due diligence to prevent the commission of such offence. 

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been 
committed  by  a  company  and  it  is  proved  that  the  offence  has  been  committed  with  the  consent  or 
connivance  of  or  is  attributable  to  any  neglect  on  the  part  of  any  director,  manager,  secretary  or  other 
officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty 
of having committed such offence and shall be liable to be proceeded against and punished accordingly. 

Explanation.–For the purposes of this section,– 

(a)  “company”  means a  body  corporate and  includes a  firm  or  other  association  of  individuals; 

and  

(b) “director”, in relation to a firm, means a partner in the firm.  

150.  Abetment.–(1)  Whoever  abets  an  offence  punishable  under  this  Act,  shall,  notwithstanding 
anything contained in the Indian Penal Code (45 of 1860), be punished with the punishment provided for 
the offence. 

(2) Without prejudice to any penalty or fine which may be imposed or prosecution proceeding which 
may  be  initiated  under  this  Act  or  any  other  law  for  the  time  being  in  force,  if  any  officer  or  other 
employee  of  the  Board  or  the  licensee  enters  into  or  acquiesces  in  any  agreement  to  do,  abstains  from 
doing, permits, conceals or connives at any act or thing whereby any theft of electricity is committed, he 
shall be punishable with imprisonment for a term which may extend to three years, or with fine, or with 
both. 

1. Ins. by Act 57 of 2003, s. 7 (w.e.f. 27-1-2004). 

68 

 
                                                           
 
1[(3)  Notwithstanding  anything  contained  in  sub-section  (1)  of  section  135,  sub-section  (1)  of  section  136, 
section  137  and  section  138, the  licence  or  certificate  of  competency  or  permit  or  such  other  authorisation  issued 
under  the  rules  made  or  deemed  to  have  been  made  under  this  Act  to  any  person  who  acting  as  an  electrical 
contractor, supervisor or worker abets the commission of an offence punishable under sub-section (1) of section 135, 
sub-section  (1)  of  section  136,  section  137,  or  section  138,  on  his  conviction  for  such  abetment,  may  also  be 
cancelled by the licensing authority: 

Provided that no order of such cancellation shall be made without giving such person an opportunity of being 

heard. 

Explanation.–For  the  purposes  of  this  sub-section,  “licencing  authority”  means  the  officer  who  for  the  time 
being in force is issuing or renewing such licence or certificate of competency or permit or such other authorisation.] 
151. Cognizance of offences.–No court shall take cognizance of an offence punishable under this Act except 
upon  a  complaint  in  writing  made  by  the  Appropriate  Government  or  Appropriate  Commission  or  any  of  their 
officer  authorised  by  them  or  a  Chief  Electrical  Inspector  or  an  Electrical  Inspector  or  licensee  or  the  generating 
company, as the case may be, for this purpose:  

2[Provided that the court may also take cognizance of an offence  punishable under this Act upon a report of a 

police officer filed under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974): 

Provided further that a special court constituted under section 153 shall be competent to take cognizance of an 

offence without the accused being committed to it for trial.] 

STATE AMENDMENT 

Karnataka 

Substitution  of  section  151.—For  section  151  of  the  Electricity  Act,  2003  (Central  Act  36  of  2003),  the 

following shall be substituted, namely:- 

“151.  Institution  of  prosecution.—No  prosecution,  shall  be  instituted  against  may  person  for  any  offence 
under this Act or any rule, regulation, licence or order made or issued there under, except at the instance of the State 
Government or a licencee or a generating company under the Act or an officer authorised in this behalf by the State 
Government  or  a  licencee  or a  generating  company  or  by  any  person  affected  by  the  act  alleged  to  constitute  the 
offence.” 
[Vide Karnataka Act 12 of 2006, s. 2] 
Maharashtra 

Substitution of section 151 of Act 36 of 2003.-.—For section 151 of the Electricity Act, 2003 (36 of 2003), in 
its application to the State of Maharashtra (hereinafter referred to as “the principal Act”), the following section shall 
be substituted, namely:- 

“151.  Cognizance  of  offences.—No  Court  shall  take  cognizance  of  an  offence  punishable  under  this  Act 

except,— 

(a) upon a complaint in  writing  made  by  Appropriate Government or Appropriate Commission or any of 
their  officer  authorised  by  them  or  a  Chief  Electrical  Inspector  or  an  Electrical  Inspector  or  a  licensee  or  the 
generating company, as the case may be, for this purpose; or  

(b) upon a police report of facts which constitute an offence: 

Provided that, such police report is based on the First Information Report filed a person who is authorised to file 

a complaint under clause (a). 
[Vide Maharashtra Act 36 of 2005, s. 2] 

3[151A. Power of police to investigate.–For the purposes of investigation of an offence punishable under this 
Act, the police officer shall have all the powers as provided in Chapter XII of the Code of Criminal Procedure, 1973 
(2 of 1974).  

151B. Certain offences to be cognizable and non-bailable.–Notwithstanding anything contained in the Code 
of Criminal Procedure, 1973 (2 of 1974), an offence punishable under sections 135 to 140 or section 150 shall be 
cognizable and non-bailable.] 

152.  Compounding  of  offences.–(1)  Notwithstanding  anything  contained  in  the  Code  of  Criminal 
Procedure, 1973 (2 of 1974), the Appropriate Government or any officer authorised by it in this behalf 

1. Ins. by Act 26 of 2007, s. 14 (w.e.f. 15-6-2007). 
2. Ins. by s.15, ibid. (w.e.f. 15-6-2007). 
3. Ins. by s.16, ibid. (w.e.f. 15-6-2007). 

69 

 
                                                           
may  accept  from  any  consumer  or  person  who  committed  or  who  is  reasonably  suspected  of  having 
committed  an  offence of  theft of  electricity  punishable  under  this  Act, a  sum of  money  by   way  of 
compounding of the offence as specified in the Table below: 

TABLE 

Nature of    Service 

Rate at which the sum of money for compounding to be collected per 
Kilowatt (KW)/Horse Power (HP)  or part thereof for Low Tension 
(LT) supply and per Kilo Volt Ampere (KVA) of contracted demand 
for High Tension (HT) 

(1) 

(2) 

1. Industrial Service 

twenty thousand rupees; 

2. Commercial Service 

ten thousand rupees; 

3. Agricultural Service 

two thousand rupees; 

4. Other Services 

four thousand rupees: 

Provided  that  the  Appropriate  Government  may,  by  notification  in  the  Official  Gazette,  amend  the 

rates specified in the Table above. 

(2) On payment of the sum of  money in accordance with sub-section (1), any  person in custody in 
connection  with  that  offence  shall  be  set  at  liberty  and  no  proceedings  shall  be  instituted  or  continued 
against such consumer or person in any criminal court. 

(3)  The  acceptance  of  the  sum  of  money  for  compounding  an  offence  in  accordance  with               

sub-section (1) by the Appropriate Government or an officer empowered in this behalf shall be deemed to 
amount  to  an  acquittal  within  the  meaning  of  section  300  of  the  Code  of  Criminal  Procedure,  1973          
(2 of 1974). 

(4) The Compounding of an offence under sub-section (1) shall be allowed only once for any person 

or consumer. 

PART XV 

SPECIAL COURTS 

153. Constitution of Special Courts.–(1) The State Government may, for the purposes of providing 
speedy  trial  of  offences  referred  to  in  1[sections  135  to  140  and  section  150],  by  notification  in  the 
Official Gazette, constitute as many Special Courts as may be necessary for such area or areas, as may be 
specified in the notification. 

(2) A Special Court shall consist of a single Judge who shall be appointed by the State Government 

with the concurrence of the High Court. 

(3)  A  person  shall  not  be  qualified  for  appointment  as  a  Judge  of  a  Special  Court  unless  he  was, 

immediately before such appointment, an Additional District and Sessions Judge. 

(4)  Where  the  office  of  the  Judge  of  a  Special  Court  is  vacant,  or  such  Judge  is  absent  from  the 
ordinary  place  of  sitting  of  such  Special  Court,  or  he  is  incapacitated  by  illness  or  otherwise  for  the 
performance of his duties, any urgent business in the Special Court shall be disposed of– 

(a) by a Judge, if any, exercising jurisdiction in the Special Court; 

1. Subs. by Act 26 of 2007, s. 17, for “sections 135 to 139” (w.e.f. 15-6-2007). 

70 

 
 
 
                                                           
(b) where there is no such other Judge available, in accordance with the direction of District and Sessions 

Judge having jurisdiction over the ordinary place of sitting of Special Court, as notified under sub-section (1). 

STATE AMENDMENT 

Maharashtra 

Amendment of section 153 of Act (36 of 2003).—In section 153 of the principal Act, after sub-section (4), the 

following sub-section shall be added, namely:— 

“(5)  Where  no  Special  Court  for  any  area  or  areas  has  been  constituted  under  sub-section  (1),  one  or  more 
Additional District and Sessions Judges, as may be designated by the High Court, for such area or areas, from time 
to time, shall exercise the powers of the Special Court under this Act and any Judge so designated shall be deemed 
to be a special Court for the purposes of this Act.” 
[Vide Maharashtra Act 36 of 2005, s. 3] 

154. Procedure and power of Special Court.–(1) Notwithstanding anything contained in the Code of Criminal 
Procedure, 1973 (2 of 1974), every offence punishable under  1[sections 135 to 140 and section 150] shall be triable 
only by the Special Court within whose jurisdiction such offence has been committed. 

(2) Where it appears to any court in the course of any inquiry or trial that an offence punishable under  1[sections 
135  to  140  and  section  150]  in  respect  of  any  offence  that  the  case  is  one  which  is  triable  by  a  Special  Court 
constituted under this Act for the area in which such case has arisen, it shall transfer such case to such Special Court, 
and thereupon such case shall be tried and disposed of by such Special Court in accordance with the provisions of 
this Act: 

Provided that it shall be lawful for such Special Court to act on the evidence, if any, recorded by any court in 

the case of presence of the accused before the transfer of the case to any Special Court: 

Provided  further  that  if  such  Special  Court  is  of  opinion  that  further  examination,  cross-examination  and  re-
examination of any of the witnesses whose evidence has already been recorded, is required in the interest of justice, 
it  may  re-summon  any  such  witness  and  after  such  further  examination,  cross-  examination  or  re-examination,  if 
any, as it may permit, the witness shall be discharged. 

(3) The Special Court may, notwithstanding anything contained in sub-section (1) of section 260 or section 262 
of the Code of Criminal Procedure, 1973 (2 of 1974), try the offence referred to in 1[sections 135 to 140 and section 
150] in a summary way in accordance with the procedure prescribed in the said Code and the provisions of sections 
263 to 265 of the said Code shall, so far as may be, apply to such trial: 

Provided that where in the course of a summary trial under this sub-section, it appears to the Special Court that 
the nature of the case is such that it is undesirable to try such case in summary way, the Special Court shall recall 
any witness who may have been examined and proceed to re-hear the case in the manner provided by the provisions 
of the said Code for the trial of such offence: 

Provided further that in the case of any conviction in a summary trial under this section, it shall be lawful for a 

Special Court to pass a sentence of imprisonment for a term not exceeding five years. 

(4) A Special Court may, with a view to obtaining the evidence of any person supposed to have been directly or 
indirectly concerned in or privy to, any offence tender pardon to such person on condition of his making a full and 
true  disclosure  of  the  circumstances  within  his  knowledge  relating  to  the  offence  and  to  every  other 
person concerned whether as principal or abettor in the commission thereof, and any pardon so tendered 
shall, for the purposes of section 308 of the Code of Criminal Procedure, 1973 (2 of 1974), be deemed to 
have been tendered under section 307 thereof. 

(5) The 2[Special Court shall] determine the civil liability against a consumer or a person in terms of 
money for theft of energy which shall not be less than an amount equivalent to two times of the tariff rate 
applicable for a period of twelve months preceding the date of detection of theft of energy or the exact 
period  of  theft  if  determined  whichever  is  less  and  the  amount  of  civil  liability  so  determined  shall  be 
recovered as if it were a decree of civil court. 

1. Subs. by Act 26 of 2007, s. 17, for “sections 135 to 139” (w.e.f. 15-6-2007). 
2. Subs. by s. 18, ibid., for “Special Court may” (w.e.f. 15-6-2007). 

71 

 
                                                           
 
 
 
(6) In case the civil liability so determined finally by the Special Court is less than the amount deposited 
by the consumer or the person, the excess amount so deposited by the consumer or the person, to the  Board or 
licensee  or  the  concerned  person,    as  the  case  may  be,  shall  be  refunded  by    the    Board    or  licensee or  the 
concerned person, as the case may be, within a fortnight from the date of communication of the order of the 
Special Court together with interest at the prevailing Reserve Bank of India prime lending rate for the period 
from the date of such deposit till the date of payment. 

Explanation.–For the purposes of this section, “civil liability” means loss or damage incurred by the Board 
or  licensee or  the concerned  person,  as  the  case  may  be,  due  to  the  commission  of an offence referred  to  in 
1[sections 135 to 140 and section 150.] 

STATE AMENDMENT 

Maharashtra 

Amendment of section 154 of Act 36 of 2003.—In section 154 of the principal Act, for sub-section (1), 

the following sub-section shall be substituted, namely:— 

“(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),— 

(a) every Special Court may take cognizance of an offence without the accused being committed to it 

for trial; and 

(b)  every  offence  punishable  under  sections  135  to  139  shall  be  triable  only  by  the  Special  Court 

within whose jurisdiction such offence has been committed.” 
[Vide Maharashtra Act 36 of 2005, s. 4] 
155.  Special  Court  to  have  powers  of  Court  of  Session.–Save  as  otherwise  provided  in  this  Act,  the 
Code of Criminal Procedure, 1973 (2 of 1974), in so far as they are not inconsistent with the provisions of this 
Act, shall apply to the proceedings before the Special Court and for the purpose of the provisions of the said 
enactments, the Special Court shall be deemed to be a Court of Session and shall have all powers of a Court of 
Session  and  the  person  conducting  a  prosecution  before  the  Special  Court  shall  be  deemed  to  be  a  Public 
Prosecutor. 

156.  Appeal  and  revision.–The  High  Court  may  exercise,  so  far  as  may  be  applicable,  all  the  powers 
conferred by Chapters XXIX and XXX of the Code of Criminal Procedure, 1973 (2 of 1974), as if the Special 
Court within the local limits of the jurisdiction of the High Court is a District Court, or as the case may be, the 
Court of Session, trying cases within the local limits of jurisdiction of the High Court. 

157. Review.–The  Special  Court  may,  on  a petition  or  otherwise  and  in  order  to  prevent  miscarriage of 
justice, review its judgment or order passed under section 154, but no such review petition shall be entertained 
except on the ground that it was such order passed under a mistake of fact, ignorance of any material fact or 
any error apparent on the face of the record: 

Provided  that  the  Special  Court  shall  not  allow  any  review  petition  and  set  aside  its  previous  order  or 

judgment without hearing the parties affected. 

Explanation.–For the purposes of this Part, “Special Courts” means the Special Courts constituted under 

sub-section (1) of section 153.  

PART XVI 

DISPUTE RESOLUTION 

Arbitration 

158. Arbitration.–Where any matter is, by or under this Act, directed to be determined by arbitration, the 
matter  shall,  unless  it  is  otherwise  expressly  provided  in  the  licence  of  a  licensee,  be  determined  by  such 
person or persons as the Appropriate Commission may nominate in that behalf on the application of either 

1. Subs. by Act 26 of 2007, s. 18, for “sections 135 to 139” (w.e.f. 15-6-2007). 

72 

 
                                                           
 
 
party;  but  in  all  other  respects  the  arbitration  shall  be  subject  to  the  provisions  of  the  Arbitration  and 
Conciliation Act, 1996 (26 of 1996). 

PART XVII 

OTHER PROVISIONS 

Protective clauses 

159. Protection of railways, highways, airports and canals, docks, wharfs and piers.–No person 
shall,  in  the  generation,  transmission,  distribution,  supply  or  use  of  electricity,  in  any  way  injure  any 
railway,  highway,  airports,  tramway,  canal  or  water-way  or  any  dock,  wharf  or  pier  vested  in  or 
controlled by a local authority, or obstruct or interfere with the traffic on any railway, airway, tramway, 
canal or water-way. 

160.  Protection  of  telegraphic,  telephonic  and  electric  signalling  lines.–(1)  Every  person 
generating, transmitting, distributing, supplying or using electricity (hereinafter in this section referred to 
as  the  "operator")  shall  take  all  reasonable  precautions  in  constructing,  laying  down  and  placing  his 
electric lines, electrical plant and other works and in working his system, so as not injuriously to affect, 
whether by induction or otherwise, the working of any wire or line used for the purpose of telegraphic, 
telephone or electric signalling communication, or the currents in such wire or line. 

(2)  Where  any  difference  or  dispute  arises  between  the  operator,  and  the  telegraph  authority  as  to 
whether  the  operator  has  constructed,  laid  down  or  placed  his  electric  lines,  electrical  plant  or  other 
works,  or  worked  his  system,  in  contravention  of  sub-section  (1),  or  as  to  whether  the  working  of  any 
wire,  line  or  current  is  or  is  not injuriously  affected  thereby, the  matter  shall  be  referred  to the  Central 
Government and the Central Government, unless it is of opinion that the wire or line has been placed in 
unreasonable proximity to the electric lines, electrical plant or works of the operator after the construction 
of  such  lines,  plant  or  works,  may  direct  the  operator  to  make  such  alterations  in,  or  additions  to,  his 
system as may be necessary in order to comply with the provisions of this section, and the operator shall 
make such alterations or additions accordingly: 

Provided  that  nothing  in  this  sub-section  shall  apply  to  the  repair,  renewal  or  amendment  of  any 
electric line or electrical plant so long as the course of the electric line or electrical plant and the amount 
and nature of the electricity transmitted thereby are not altered. 

(3)  Where  the  operator  makes  default  in  complying  with  the  requirements  of  this  section,  he  shall 
make full compensation for any loss or damage incurred by reason thereof, and, where any difference or 
dispute arises as to the amount of such compensation, the matter shall be determined by arbitration. 

Explanation.–For  the  purposes  of  this  section,  a  telegraph  line  shall  be  deemed  to  be  injuriously 
affected if telegraphic, telephonic or electric signalling communication by means of such line is, whether 
through induction or otherwise, prejudicially interfered with by an electric line, electrical plant or other 
work or by any use made thereof. 

161. Notice of accidents and inquiries.–(1) If any accident occurs in connection with the generation, 
transmission,  distribution,  supply  or  use  of  electricity  in  or  in  connection  with,  any  part  of  the  electric 
lines or electrical plant of any person and the accident results or is likely to have resulted in loss of human 
or  animal  life  or  in  any  injury  to  a  human  being  or  an  animal,  such  person  shall  give  notice  of  the 
occurrence and of any such loss or injury actually caused by the accident, in such form and within such 
time as may be prescribed, to the Electrical Inspector or such other person as aforesaid and to such other 
authorities as the Appropriate Government may by general or special order, direct. 

(2) The Appropriate Government may, if  it thinks fit, require any Electrical Inspector, or any other 

person appointed by it in this behalf, to inquire and report– 

73 

 
(a)  as  to  the  cause  of  any  accident  affecting  the  safety  of  the  public,  which  may  have  been 
occasioned  by  or  in  connection  with,  the  generation,  transmission,  distribution,  supply  or  use  of 
electricity, or 

(b) as to the manner in, and extent to, which the provisions of this Act or rules and regulations 
made  thereunder  or  of  any  licence,  so  far  as  those  provisions  affect  the  safety  of  any  person,  have 
been complied with. 

(3) Every Electrical Inspector or other person holding an inquiry under sub-section (2) shall have all 
the  powers  of  a  civil  court  under  the  Code  of  Civil  Procedure,  1908  (5  of  1908)  for  the  purpose  of 
enforcing the attendance of witnesses and compelling the production of documents and material objects, 
and  every  person  required  by  an  Electrical  Inspector  be  legally  bound  to  do  so  within  the  meaning  of 
section 176 of the Indian Penal Code (45 of 1860). 

162.  Appointment  of  Chief  Electrical  Inspector  and  Electrical  Inspector.–(1)  The  Appropriate 
Government  may,  by  notification,  appoint  duly  qualified  persons  to  be  Chief  Electrical  Inspector  or 
Electrical  Inspectors  and  every  such  Inspector  so  appointed  shall  exercise  the  powers  and  perform  the 
functions of a Chief Electrical Inspector or an Electrical Inspector under this Act and exercise such other 
powers  and  perform  such  other  functions  as  may  be  prescribed  within  such  areas  or  in respect  of  such 
class of works and electric  installations and subject to such restrictions as the Appropriate Government 
may direct. 

(2) In the absence of express provision to the contrary in this Act, or any rule made thereunder, an 
appeal  shall  lie  from  the  decision  of  a  Chief  Electrical  Inspector  or  an  Electrical  Inspector  to  the 
Appropriate Government or if the Appropriate Government, by general or special order so directs, to an 
Appropriate Commission. 

Karnataka 

STATE AMENDMENT 

Amendment  of  section  162.—In  section  162  of  the  Principal  Act,  after  sub-section  (2),  the 

following shall be inserted, namely:- 

“(3) where no provision is made by Central Government or the Authority in respect of powers 
and functions and qualifications of Chief Electrical Inspector and Electrical Inspectors, the State 
Government may by rules prescribe the same”. 

[Vide Karnataka Act 39 of 2014, s. 3] 

163. Power for licensee to enter premises and to remove fittings or other apparatus of licensee.–
(1) A licensee or any person duly authorised by a licence may, at any reasonable time, and on informing 
the occupier of his intention, enter any premises to which electricity is, or has been, supplied by him, of 
any premises or land, under, over, along, across, in or upon which the electric supply-lines or other works 
have been lawfully placed by him for the purpose of– 

(a) inspecting, testing, repairing or altering the electric supply-lines, meters, fittings, works and 

apparatus for the supply of electricity belonging to the licensee; or 

(b)  ascertaining  the  amount  of  electricity  supplied  or  the  electrical  quantity  contained  in  the 

supply; or 

(c)  removing  where  a  supply  of  electricity  is  no  longer  required,  or  where  the  licensee  is 
authorised to take away and cut off such supply, any electric supply-lines, meters, fittings, works or 
apparatus belonging to the licensee. 

74 

 
(2) A licensee or any person authorised as aforesaid may also, in pursuance of a special order in this 
behalf made by an Executive Magistrate and after giving not less than twenty-four hours notice in writing 
to the occupier,– 

(a)  enter  any  premises  or  land referred  to  in  sub-section  (1) for  any  of the  purposes  mentioned 

therein; 

(b) enter any premises to which electricity is to be supplied by him, for the purpose of examining 
and testing the electric wires fittings, works and apparatus for the use of electricity belonging to the 
consumer. 

(3) Where a consumer refuses to allow a licensee or any person authorised as aforesaid to enter his 
premises or land in pursuance of the provisions of sub-section (1) or, sub-section (2), when such licensee 
or  person  has  so  entered,  refuses  to  allow  him  to  perform  any  act  which  he  is  authorised  by  those         
sub-sections to perform, or fails to give reasonable facilities for such entry or performance, the licensee 
may, after the expiry of twenty-four hours from the service of a notice in writing on the consumer, cut off 
the supply to the consumer for so long as such refusal or failure continues, but for no longer. 

164.  Exercise  of  powers  of  Telegraph  Authority  in  certain  cases.–The  Appropriate  Government 
may,  by  order  in  writing,  for  the  placing  of  electric  lines  or  electrical  plant  for  the  transmission  of 
electricity  or  for  the  purpose  of  telephonic  or  telegraphic  communications  necessary  for  the  proper  co-
ordination of works, confer upon any public officer, licensee or any other person engaged in the business 
of  supplying  electricity  under  this  Act,  subject  to  such  conditions  and  restrictions,  if  any,  as  the 
Appropriate Government may think fit to impose and to the provisions of the Indian Telegraph Act, 1885 
(13 of 1885), any of the powers which the telegraph authority possesses under that Act with respect to the 
placing  of  telegraph  lines  and  posts  for  the  purposes  of  a  telegraph  established  or  maintained,  by  the 
Government or to be so established or maintained. 

165. Amendment of sections 40 and 41 of Act 1 of 1894.–(1) In section 40, sub-section (1) of clause 
(b) and section 41, sub-section (5) of the Land Acquisition Act, 1894, the term “work” shall be deemed to 
include electricity supplied or to be supplied by means of the work to be constructed. 

(2)  The  Appropriate  Government  may,  on  recommendation  of  the  Appropriate  Commission  in  this 
behalf, if it thinks fit, on the application of any person, not being a company desirous of obtaining any 
land for its purposes, direct that he may acquire such land under the provisions of the Land Acquisition 
Act, 1894 (1 of 1894) in the same manner and on the same conditions as it might be acquired if the person 
were a company. 

PART XVIII 

MISCELLANEOUS 

166.  Coordination  Forum.–(1)  The  Central  Government  shall  constitute  a  coordination  forum 
consisting  of the  Chairperson  of the  Central  Commission and  Members  thereof,  the  Chairperson  of  the 
Authority,  representatives  of  generating  companies  and  transmission  licensees  engaged  in  inter-State 
transmission of electricity for smooth and coordinated development of the power system in the country. 

(2) The Central Government shall also constitute a forum of regulators consisting of the Chairperson 

of the Central Commission and Chairpersons of the State Commissions. 

(3) The Chairperson of the Central Commission shall be the Chairperson of the Forum of regulators 

referred to in sub-section (2). 

(4) The State Government shall constitute a Coordination Forum consisting of the Chairperson of the 
State  Commission  and  Members  thereof  representatives  of  the  generating  companies,  transmission 
licensee  and  distribution  licensees  engaged  in  generation, transmission  and  distribution  of  electricity  in 
that State for smooth and coordinated development of the power system in the State. 

75 

 
(5) There shall be a committee in each district to be constituted by the Appropriate Government– 

(a) to coordinate and review the extension of electrification in each district; 

(b) to review the quality of power supply and consumer satisfaction; 

(c) to promote energy efficiency and its conservation. 

167. Exemption of electric lines or electrical plants from attachment in certain cases.–Where any 
electric lines or electrical plant, belonging to a licensee are placed in or upon any premises or land not 
being in the possession of the licensee, such electric lines or electrical plant shall not be liable to be taken 
in execution under any process of any civil court or in any proceedings in insolvency against the person in 
whose possession the same may be. 

168.  Protection  of  action  taken  in  good  faith.–No  suit,  prosecution  or  other  proceeding  shall  lie 
against the Appropriate Government or Appellate Tribunal or the Appropriate Commission or any officer 
of Appropriate Government, or any Member, Officer or other employee of the Appellate Tribunal or any 
Members,  officer  or  other  employees  of  the  Appropriate  Commission  or  the  assessing  officer  or  any 
public  servant  for  anything  done  or  in  good  faith  purporting  to  be  done  under  this  Act  or  the  rules  or 
regulations made thereunder. 

169.  Members,  officers,  etc.,  of  Appellate  Tribunal,  Appropriate  Commission  to  be  public 
servants.–The  Chairperson,  Members,  officers  and  other  employees  of  the  Appellate  Tribunal  and  the 
Chairperson, Members, Secretary, officers and other employees of the Appropriate Commission and the 
assessing officer referred to in section 126 shall be deemed, when acting or purporting to act in pursuance 
of any of the provisions of this Act to be public servants within the meaning of section 21 of the Indian 
Penal Code (45 of 1860). 

170. Recovery of penalty payable under this Act.–Any penalty payable by a person under this Act, 

if not paid, may be recovered as if it were an arrear of land revenue. 

171. Services of notices, orders or documents.–(1) Every notice, order or document by or under this 
Act required, or authorised to be addressed to any person may be served on him by delivering the same 
after obtaining signed acknowledgement receipt therefor or by registered post or such means of delivery 
as may be prescribed– 

(a)  where  the  Appropriate  Government  is  the  addressee,  at  the  office  of  such  officer  as  the 

Appropriate Government may prescribe in this behalf; 

(b)  where  the  Appropriate  Commission  is  the  addressee,  at  the  office  of  the  Appropriate 

Commission; 

(c) where a company is the addressee, at the registered office of the company or, in the event of 

the registered office of the company not being in India, at the head office of the company in India; 

(d) where any other person is the addressee, at the usual or last known place of abode or business 

of the person. 

(2) Every notice, order or document by or under this Act required or authorised to be addressed to the 
owner  or  occupier  of  any  premises  shall  be  deemed  to  be  properly  addressed  if  addressed  by  the 
description  of  the  owner  or  occupier  of  the  premises  (naming  the  premises),  and  may  be  served  by 
delivering  it,  or  a  true  copy  thereof,  to  some  person  on  the  premises,  or  if  there  is  no  person  on  the 
premises  to  whom  the  same  can  with  reasonable  diligence  be  delivered,  by  affixing  it  on  some 
conspicuous part of the premises. 

172. Transitional provisions.–Notwithstanding anything to the contrary contained in this Act,– 

(a) a State Electricity Board constituted under the repealed laws shall be deemed to be the State 
Transmission Utility and a licensee under the provisions of this Act for a period of one year from the 

76 

 
appointed date or such earlier date as the State Government may notify, and shall perform the duties 
and functions  of  the  State Transmission  Utility  and  a  licensee  in  accordance  with the  provisions of 
this Act and rules and regulations made thereunder: 

Provided that the State Government may, by notification, authorise the State Electricity Board to 
continue to function as the State Transmission Utility or a licensee for such further period beyond the 
said  period  of  one  year  as  may  be  mutually  decided  by  the  Central  Government  and  the  State 
Government; 

(b)  all  licences,  authorisations,  approvals,  clearances  and  permissions  granted  under  the 
provisions of the repealed laws may, for a period not exceeding one year from the appointed date or 
such earlier period, as may be notified by the Appropriate Government, continue to operate as if the 
repealed laws  were  in  force  with respect to  such  licences,  authorisations,  approvals,  clearances  and 
permissions,  as  the  case  may  be,  and  thereafter  such  licences,  authorisations,  approvals,  clearances 
and permissions shall be deemed to be licences, authorisations, approvals, clearances and permission 
under this Act and all provisions of this Act shall apply accordingly to such licences, authorisations, 
approvals, clearances and permissions; 

(c) the undertaking of the State Electricity Boards established under section 5 of the Electricity 
(Supply)  Act,  1948  (54  of  1948)  may  after  the  expiry  of  the  period  specified  in  clause  (a)  be 
transferred in accordance with the provisions of Part XIII of this Act; 

(d) the State Government may, by notification, declare that any or all the provisions contained in 
this Act, shall not apply in that State for such period, not exceeding six months from the appointed 
date, as may be stipulated in the notification. 

173. Inconsistency in laws.–Nothing contained in this Act or any rule or regulation made thereunder 
or any instrument having effect by virtue of this Act, rule or regulation shall have effect in so far as it is 
inconsistent with any other provisions of the Consumer Protection Act, 1986 (68 of 1986) or the Atomic 
Energy Act, 1962 (33 of 1962) or the Railways Act, 1989 (24 of 1989). 

174. Act to have overriding effect.–Save as otherwise provided in section 173, the provisions of this 
Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the 
time being in force or in any instrument having effect by virtue of any law other than this Act. 

175.  Provisions  of  this  Act  to  be  in  addition  to  and  not  in  derogation  of  other  laws.–The 
provisions of this Act are in addition to and not in derogation of any other law for the time being in force. 

176.  Power  of  Central  Government  to  make  rules.–(1)  The  Central  Government  may,  by 

notification, make rules for carrying out the provisions of this Act. 

(2)  In  particular  and  without  prejudice  to  the  generality  of  the  foregoing  power,  such  rules  may 

provide for all or any of the following matters, namely:– 

(a) the time within which the objection and suggestions on the draft National Electricity Plan to 

be invited by the Authority under the proviso to sub-section (4) of section 3; 

(b)  the  additional  requirements  1[relating  to  the  capital  adequacy,  creditworthiness  or  code  of 

conduct] under sixth proviso to section 14; 

(c) the payment of fees for application for grant of licence under sub-section (1) of section 15; 

(d) the constitution and functions of the National Load Despatch Centre under sub-section (2) of 

section 26; 

1. Subs. by Act 26 of 2007, s. 19, for “(including the capital adequacy, creditworthiness or code of conduct)” (w.e.f. 15-6-2007). 

77 

 
                                                           
 
(e)  the  works  of  licensees  affecting  the  property  of  owner  or  occupier  under  sub-section  (2)  of 

section 67; 

(f) such other cases which may be prescribed under clause (c) of sub-section (2) of section 68; 

(g) allowances and fees payable to other Members for attending the meetings of Authority under 

sub-section (14) of section 70. 

(h) other terms and conditions of service of the Chairperson and Members of the Authority under 

sub-section (15) of section 70; 

(i) the functions and duties of the Central Electricity Authority under section 73; 

(j) the salary, allowances and other conditions of service of Chairperson and Member of Central 

Commission under sub-section (2) of section 89; 

(k)  the  form  and  manner  in  which  and  the  authority  before  whom  oath  of  office  and  secrecy 

should be subscribed under sub-section (3) of section 89; 

(l) the procedure to be prescribed by the Central Government under the proviso to sub-section (2) 

of section 90; 

 (m) any other matter required to be prescribed under clause (g) of sub-section (1) of section 94; 

(n)  the  form  in  which  the  Central  Commission  shall  prepare  its  annual  statement  of  accounts 

under sub-section (1) of section 100; 

(o) the form in which and time at which the Central Commission shall prepare its annual report 

under sub-section (1) of section 101; 

(p) the form in which and time at which the Central Commission shall prepare its budget under 

section 106; 

(q)  the  form  and  the  manner  of  verifying  such  form,  and  fee  for  filing  appeal  under                  

sub-section (2) of section 111; 

(r)  the  salary  and  allowances  payable  to  and  the  other  terms  and  conditions  of  service  of  the 

Chairperson of the Appellate Tribunal and Members of the Appellate Tribunal under section 115; 

(s) the salary and allowances and other conditions of service of the officers and employees of the 

Appellate Tribunal under sub-section (3) of section 119; 

(t) the additional matters in respect of which the Appellate Tribunal may exercise the powers of a 

civil court under clause (i) of sub-section (2) of section 120; 

(u) the authority to whom the appeal shall be filed under sub-section (1) of section 127; 

(v) manner of holding inquiry by an adjudicating officer under sub-section (1) of section 143; 

(w) the form  in  which  and  the  time  at  which service of  notices  to any  person  or  to  the  Central 

Government for the purpose under sub-section (1) of section 161; 

(x)  the  powers  to  be  exercised  and  the  functions  to  be  performed  by  the  Inspectors  under         

sub-section (1) of section 162; 

(y) the manner of delivery of every notice, order or document to be served under sub-section (1) 

of section 171; 

(z) any other matter which is required to be, or may be, prescribed. 

177.  Powers  of  Authority  to  make  regulations.–(1)  The  Authority  may,  by  notification,  make 

regulations consistent with this Act and the rules generally to carry out the provisions of this Act. 

78 

 
(2)  In  particular  and  without  prejudice  to  the  generality  of  the  power  conferred  in  sub-section  (1), 

such regulations may provide for all or any of the following matters, namely:– 

(a) the Grid Standards under section 34; 

(b) suitable measures relating to safety and electric supply under section 53; 

(c) the installation and operation of meters under section 55; 

(d) the rules of procedure for transaction of business under sub-section (9) of section 70; 

(e) the technical standards for construction of electrical plants and electric lines and connectivity 

to the grid under clause (b) of section 73; 

(f) the form and manner in which and the time at which the State Government and licensees shall 

furnish statistics, returns or other information under section 74. 

(g) any other matter which is to be, or may be, specified; 

(3) All regulations made by the Authority under this Act shall be subject to the conditions of previous 

publication. 

178. Powers  of  Central  Commission  to  make  regulations.–(1) The  Central  Commission  may,  by 
notification make regulations consistent with this Act and the rules generally to carry out the provisions of 
this Act. 

(2)  In  particular  and  without  prejudice  to  the  generality  of  the  power  contained  in  sub-section  (1), 

such regulations may provide for all or any of following matters, namely:– 

(a) period to be specified under the first proviso to section 14; 

(b) the form and the manner of the application under sub-section (1) of section 15; 

(c) the manner and particulars of notice under sub-section (2) of section 15; 

(d) the conditions of licence under section 16; 

(e) the manner and particulars of notice under clause (a) of sub-section (2) of section 18; 

(f)  publication  of  alterations  or  amendments  to  be  made  in  the  licence  under  clause  (c)  of         

sub-section (2) of section 18; 

(g) Grid Code under sub-section (2) of section 28; 

(h) levy and collection of fees and charge from generating companies or transmission utilities or 

licensees under sub-section (4) of section 28; 

(i) rates, charges and terms and conditions in respect of intervening transmission facilities under 

proviso to section 36; 

(j)  payment  of  the  transmission  charges  and  a  surcharge  under  sub-clause  (ii)  of  clause  (d)  of  

sub-section (2) of section 38; 

(k)  reduction  1***  of  surcharge  and  cross  subsidies  under  second  proviso  to  sub-clause  (ii)  of 

clause (d) of sub-section (2) of section 38; 

(l)  payment  of  transmission  charges  and  a  surcharge  under  sub-clause  (ii)  of  clause  (c)  of     

section 40; 

(m) reduction 1*** of surcharge and cross-subsidies under the second proviso to sub-clause (ii) of 

clause (c) of section 40; 

1. The words “and elimination” omitted by Act 26 of 2007, s. 20 (w.e.f. 15-6-2007). 

79 

 
                                                           
(n)  proportion  of revenues  from  other  business to  be  utilised  for  reducing  the  transmission  and 

wheeling charges under proviso to section 41; 

(o) duties of electricity trader under sub-section (2) of section 52; 

(p)  standards  of  performance  of  a  licensee  or  class  of  licensees  under  sub-section  (1)  of       

section 57; 

(q) the period within which information to be furnished by the licensee under sub-section (1) of 

section 59; 

1 [(r) the manner of reduction of cross-subsidies under clause (g) of section 61;] 

(s) the terms and conditions for the determination of tariff under section 61; 

(t) details to be furnished by licensee or generating company under sub-section (2) of section 62; 

(u)  the  procedures  for  calculating  the  expected  revenue  from  tariff  and  charges  under               

sub-section (5) of section 62; 

(v)  the  manner  of  making  an  application  before  the  Central  Commission  and  the  fee  payable 

therefor under sub-section (1) of section 64; 

(w) the manner of publication of application under sub-section (2) of section 64; 

(x) issue of tariff order with modifications or conditions under sub-section (3) of section 64; 

(y)  the  manner  by  which  development  of  market  in  power  including  trading  specified  under 

section 66; 

(z)  the  powers  and  duties  of  the  Secretary  of  the  Central  Commission  under  sub-section  (1)  of 

section 91; 

(za) the terms and conditions of service of the Secretary, officers and other employees of Central 

Commission under sub-section (3) of section 91; 

(zb) the rules of procedure for transaction of business under sub-section (1) of section 92; 

(zc)  minimum  information  to  be  maintained  by  a  licensee  or  the  generating  company  and  the 

manner of such information to be maintained under sub-section (8) of section 128; 

(zd) the manner of service and publication of notice under section 130; 

(ze) any other matter which is to be, or may be, specified by regulations. 

(3) All regulations made by the Central Commission under this Act shall be subject to the conditions 

of previous publication. 

179.  Rules  and  regulations  to  be  laid  before  Parliament.–Every  rule  made  by  the  Central 
Government,  every  regulation  made  by  the  Authority,  and  every  regulation  made  by  the  Central 
Commission shall be laid, as soon as may be after it is made, before each House of the Parliament, while 
it is in session, for a total period of thirty days which may be comprised in one session or in two or more 
successive  sessions,  and  if,  before  the  expiry  of  the  session  immediately  following  the  session  or  the 
successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or 
agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only 
in such modified form or be of no effect, as the case may be; so, however, that any such modification or 
annulment  shall  be  without  prejudice  to  the  validity  of  anything  previously  done  under  that  rule  or 
regulation. 

1. Subs. by Act 26 of 2007, s. 20, for clause (r) (w.e.f. 15-6-2007). 

80 

 
                                                           
180. Powers of State Governments to make rules.–(1) The State Government may, by notification, 

make rules for carrying out the provisions of this Act. 

(2)  In  particular  and  without  prejudice  to  the  generality  of  the  foregoing  power,  such  rules  may 

provide for all or any of the following matters, namely:– 

(a) the payment of fees for application for grant of licence under sub-section (1) of section 15; 

(b)  the  works  of  licensees  affecting  the  property  of  other  persons  under  sub-section  (2)  of   

section 67; 

(c) such other matters which may be prescribed under clause (c) of sub-section (2) of section 68; 

(d)  the  salary,  allowances  and  other  terms  and  conditions  of  service  of  the  Chairperson  and 

Members of the State Commission under sub-section (2) of section 89; 

(e)  the  form  and  manner  in  which  and  the  authority  before  whom  oath  of  office  and  secrecy 

should be subscribed under sub-section (3) of section 89; 

(f)  any  other  matter  required  to  be  prescribed  by  the  State  Commission  under  clause  (g)  of       

sub-section (1) of section 94; 

(g) the manner of applying the Fund under sub-section (3) of section 103; 

(h) the form in which and time at which the State Commission shall prepare its annual accounts 

under sub-section (1) of section 104; 

(i)  the  form  in  which  and  time  at  which  the  State  Commission  shall  prepare  its  annual  report 

under sub-section (1) of section 105; 

(j)  the  form  in  which  and  time  at  which  the  State  Commission  shall  prepare  its  budget  under 

section 106; 

(k) manner of service of provisional order of assessment under sub-section (2) of section 126; 

(l) manner of holding inquiry by an adjudicating officer under sub-section (1) of section 143; 

(m)  the  form  in  which  and  the  time  at  which  notice  to  the  Electrical  Inspector  under                 

sub-section (1) of section 161; 

(n)  the  manner  of  delivery  of  every  notice,  order  or  document  under  sub-section  (1)  of        

section 171; and  

(o) any other matter which is required to be, or may be, prescribed. 

STATE AMENDMENT 

Karnataka 

Amendment of section 180.-In section 180 of the Principal Act, in sub-section (2),- 

(a) after clause (a), the following shall be inserted, namely:- 

“(aa) Subject to section 53,- 

(i)  regarding  procedure  of  Inspection  by  the  Chief  Electrical  Inspector  and  Electrical 

Inspectors; 

(ii) regarding terms and conditions and manner of issue of Licence to electrical Contractors, 

permit to Supervisors and Wireman and Competency certificates; 

(iii) manner of Scrutiny and approval of Electrical Installation drawings; 

81 

 
(iv) Levy of fee for inspections and other services rendered by the Chief Electrical Inspector 

and Electrical Inspectors; 

(v) manner of Collection of fee and if not remitted within the stipulated time to recover the 

same as arrears of land revenue.” 

(b) after clause (m), the following shall be inserted, namely:- 

“(mm) Subject to section 162 regarding powers and functions and qualifications of the Chief 

Electrical Inspector and Electrical Inspectors.” 

[Vide Karnataka Act 39 of 2014, s. 4] 

181.  Powers  of  State  Commissions  to  make  regulations.–(1)  The  State  Commissions  may,  by 
notification, make regulations consistent with this Act and the rules generally to carry out the provisions 
of this Act. 

(2)  In  particular  and  without  prejudice  to  the  generality  of  the  power  contained  in  sub-section  (1), 

such regulations may provide for all or any of the following matters, namely:– 

(a) period to be specified under the first proviso to section 14; 

(b) the form and the manner of application under sub-section (1) of section 15; 

(c) the manner and particulars of application for licence to be published under sub-section (2) of 

section 15; 

(d) the conditions of licence unde section 16; 

(e) the manner and particulars of notice under clause (a) of sub-section (2) of section 18; 

(f)  publication  of  the  alterations  or  amendments  to  be  made  in  the  licence  under  clause  (c)  of   

sub-section (2) of section 18; 

(g)  levy  and  collection  of  fees  and  charges  from  generating  companies  or  licensees  under        

sub-section (3) of section 32; 

(h)  rates,  charges  and  the  terms  and  conditions  in  respect  of  intervening  transmission  facilities 

under proviso to section 36; 

(i)  payment  of  the  transmission  charges  and  a  surcharge  under  sub-clause  (ii)  of  clause  (d)  of    

sub-section (2) of section 39; 

(j) reduction 1*** of surcharge and cross subsidies under second proviso to sub-clause (ii) of 

clause (d) of sub-section (2) of section 39; 

(k) manner and utilisation of payment and surcharge under the fourth proviso to sub-clause (ii) of 

clause (d) of sub-section (2) of section 39; 

(l)  payment  of  the  transmission  charges  and  a  surcharge  under  sub-clause  (ii)  of  clause  (c)  of 

section 40; 

 (m)  reduction  1***  of surcharge  and cross  subsidies  under  second  proviso  to  sub-clause  (ii)  of 

clause (c) of section 40; 

(n) the manner of payment of surcharge under the fourth proviso to sub-clause (ii) of clause (c) of 

section 40; 

1. The words “and elimination” omitted by Act 26 of 2007, s. 21 (w.e.f. 15-6-2007). 

82 

 
                                                           
(o)  proportion  of revenues  from  other  business to  be  utilised  for  reducing  the  transmission  and 

wheeling charges under proviso to section 41; 

(p) reduction  1*** of surcharge and cross-subsidies under the third proviso to sub-section (2) of 

section 42; 

(q) payment of additional charges on charges of wheeling under sub-section (4) of section 42; 

(r) guidelines under sub-section (5) of section 42; 

(s) the time and manner for settlement of grievances under sub-section (7) of section 42; 

(t)  the  period  to  be  specified  by  the  State  Commission  for  the  purposes  specified  under            

sub-section (1) of section 43; 

(u) methods and principles by which charges for electricity shall be fixed under sub-section (2) of 

section 45; 

(v) reasonable security payable to the distribution licensee under sub-section (1) of section 47; 

(w) payment of interest on security under sub-section (4) of section 47; 

(x) electricity supply code under section 50; 

(y) the proportion of revenues from other business to be utilised for reducing wheeling charges 

under proviso to section 51; 

(z) duties of electricity trader under sub-section (2) of section 52; 

(za)  standards  of  performance  of  a  licensee  or  a  class  of  licensees  under  sub-section  (1)  of  

section 57; 

(zb) the period within which information to be furnished by the licensee under sub-section (1) of 

section 59; 

2[(zc) the manner of reduction of cross-subsidies under clause (g) of section 61;] 

(zd) the terms and conditions for the determination of tariff under section 61; 

(ze) details to be furnished by licensee or generating company under sub-section (2) of section 62; 

(zf)  the  methodologies  and  procedures  for  calculating  the  expected  revenue  from  tariff  and 

charges under sub-section (5) of section 62; 

(zg)  the  manner  of  making  an  application  before  the  State  Commission  and  the  fee  payable 

therefor under sub-section (1) of section 64; 

(zh) issue of tariff order with modifications or conditions under sub-section (3) of section 64; 

(zi)  the  manner  by  which  development  of  market  in  power  including  trading  specified  under 

section 66; 

(zj)  the  powers  and  duties  of  the  Secretary  of  the  State  Commission  under  sub-section  (1)  of 

section 91; 

(zk) the terms and conditions of service of the secretary, officers and other employees of the State 

Commission under sub-section (2) of section 91; 

(zl) rules of procedure for transaction of business under sub-section (1) of section 92; 

1. The Words “and elimination” omitted by Act 26 of 2007, s. 21 (w.e.f. 15-6-2007). 
2.  Subs. by 26 of 2007, s. 21, for clause (zc) (w.e.f. 15-6-2007). 

83 

 
                                                           
(zm)  minimum  information  to  be  maintained  by  a  licensee  or  the  generating  company  and  the 

manner of such information to be maintained under sub-section (8) of section 128; 

(zn) the manner of service and publication of notice under section 130; 

(zo) the form of preferring the appeal and the manner in which such form shall be verified and the 

fee for preferring the appeal under sub-section (1) of section 127; 

(zp) any other matter which is to be, or may be, specified. 

(3) All regulations made by the State Commission under this Act shall be subject to the condition of 

previous publication. 

182.  Rules  and  regulations  to  be  laid  before  State  Legislature.–Every  rule  made  by  the  State 
Government and every regulation made by the State Commission shall be laid, as soon as may be after it 
is  made,  before  each  House  of  the  State  Legislature  where  it  consists  of  two  Houses,  or  where  such 
Legislature consists of one House, before that House. 

183. Power to remove  difficulties.–(1)  If  any  difficulty  arises  in  giving  effect to  the  provisions  of 
this Act, the Central Government may, by order published, make such provisions not inconsistent with the 
provisions of this Act, as may appear to be necessary for removing the difficulty: 

Provided that no order shall be made under this section after the expiry of two years from the date of 

commencement of this Act. 

(2) Every order made under this section shall be laid, as soon as may be after it is made, before each 

House of Parliament. 

184. Provisions of Act not to apply in certain cases.–The provisions of this Act shall not apply to 
the  Ministry  or  Department  of  the  Central  Government  dealing  with  Defence,  Atomic  Energy  or  such 
other similar Ministries or Departments or undertakings or Boards or institutions under the control of such 
Ministries or Departments as may be notified by the Central Government. 

185. Repeal and saving.–(1) Save as otherwise provided in this Act, the Indian Electricity Act, 1910 
(9 of 1910), the Electricity (Supply) Act, 1948 (54 of 1948) and the Electricity Regulatory Commissions 
Act, 1998 (14 of 998) are hereby repealed.  

(2) Notwithstanding such repeal,– 

(a) anything done or any action taken or purported to have been done or taken including any rule, 
notification,  inspection,  order  or  notice  made  or  issued  or  any  appointment,  confirmation  or 
declaration made or any licence, permission, authorisation or exemption granted or any document or 
instrument  executed  or  any  direction  given  under  the  repealed  laws  shall,  in  so  far  as  it  is  not 
inconsistent  with  the  provisions  of  this  Act,  be  deemed  to  have  been  done  or  taken  under  the 
corresponding provisions of this Act; 

(b) the provisions contained in sections 12 to 18 of the Indian Electricity Act, 1910 (9 of 1910) 
and  rules  made  thereunder  shall  have  effect  until  the  rules  under  sections  67  to  69  of  this  Act  are 
made; 

(c) the Indian Electricity Rules, 1956 made under section 37 of the Indian Electricity Act, 1910  
(9 of 1910) as it stood before such repeal shall continue to be in force till the regulations under section 
53 of this Act are made; 

(d)  all  rules  made  under  sub-section  (1)  of  section  69  of  the  Electricity  (Supply)  Act,  1948  
(54 of 1948) shall continue to have effect until such rules are rescinded or modified, as the case may 
be; 

84 

 
(e) all directives issued, before the commencement of this Act, by a State Government under the 
enactments specified in the Schedule shall continue to apply for the period for which such directions 
were issued by the State Government. 

(3) The provisions of the enactments specified in the Schedule, not inconsistent with the provisions of 

this Act, shall apply to the States in which such enactments are applicable. 

(4)  The  Central  Government  may,  as  and  when  considered  necessary,  by  notification,  amend  the 

Schedule. 

(5)  Save  as  otherwise  provided  in  sub-section  (2),  the  mention  of  particular  matters  in  that  section, 
shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 
1897 (10 of 1897), with regard to the effect of repeals. 

85 

 
 
 
THE SCHEDULE 

ENACTMENTS 

[See sub-section (3) of section 185] 

1. The Orissa Electricity Reform Act, 1995 (Orissa Act No. 2 of 1996). 

2. The Haryana Electricity Reform Act, 1997 (Haryana Act No. 10 of 1998). 

3. The Andhra Pradesh Electricity Reform Act, 1998 (Andhra Pradesh Act No. 30 of 1998). 

4. The Uttar Pradesh Electricity Reform Act, 1999 (Uttar Pradesh Act No. 24 of 1999). 

5. The Karnataka Electricity Reform Act, 1999 (Karnataka Act No. 25 of 1999). 

6. The Rajasthan Electricity Reform Act, 1999 (Rajasthan Act No. 23 of 1999). 

7. The Delhi Electricity Reforms Act, 2000 (Delhi Act No. 2 of 2001). 

8. The Madhya Pradesh Vidyut Sudhar Adhiniyam, 2000 (Madhya Pradesh Act No. 4 of 2001). 

1[9. The Gujarat Electricity Industry (Reorganisation and Regulation) Act, 2003 (Gujarat Act No. 24 

of 2003).]   

1. Ins. by S.O. No. 1039(E), dated 5-9-2003. 

86 

 
 
                                                           
